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Michigan Department Of Transportation Final Report for Innovative Contracting Practices
"Accepted for Traffic" Incentive

October 15, 2007

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Table of Contents

Project Information
Background & Purpose
Bidding Outcomes
Evaluation of the Bidding Outcomes
Construction Outcomes
Evaluation of the Construction Outcomes
Conclusions
Contacts

Appendices
A. Special Provision for "Accepted for Traffic" Incentive from the I-94 Project
B. Progress Clause from the I-94 Project
C. Initial Survey Form
Initial Survey Compiled Results
E. Final Survey Form.34-40
F. Final Survey Compiled Results

Project Information

Contract ID: IM 82022-45684A

MDOT Bid Item No.: 0409-601

Federal Project: IM 0482(127)

Federal Item: KK1359

Project Description: 6.02 miles of reconstruction of mainline and ramps, drainage work, signing, lighting, concrete barrier wall, valley gutter, patching and diamond grinding on I-94 from Pelham Road to Wyoming Avenue with 20 bridge reconstructions in the cities of Dearborn, Allen Park and Detroit, Wayne County, Michigan.

Prime Contractor: Dan's Excavating, Inc.

Purpose & Background:

The purpose of this report is to document the results of an innovative contracting method used by the Michigan Department of Transportation (MDOT) called an "Accepted for Traffic" Incentive. The concept was developed based on research about innovative contracting practices used by MDOT on other projects and innovative practices used by other states. This particular concept was approved for use on a reconstruction project along I-94 in Wayne County, Michigan by the Michigan Division of the Federal Highway Administration (FHWA) under the provisions of Special Experimental Projects No. 14 (SEP-14). This final report is a requirement of the SEP-14 work plan, as approved by the FHWA. This final report also incorporates the findings and conclusions from the initial report regarding the bidding outcomes, submitted to the FHWA on August 2, 2006.

In 2004 and 2005, MDOT reconstructed approximately 6.02 miles of I-94 through the cities of Dearborn and Allen Park, on the western approach to the City of Detroit. The scope of work also included the reconstruction and rehabilitation of several bridges throughout the divided freeway corridor. The project was broken into two primary stages between the reconstruction of westbound and eastbound I-94. A minimum of two lanes of traffic in each direction was maintained on the side of the roadway not under construction during peak hours and days, with more extensive lane restrictions during non-peak hours and weekends. Temporary crossovers that were constructed during the fall of 2004 were utilized to shift traffic from one roadway to another during staged construction.

This section of I-94 carries approximately 92,000 vehicles per day and is the main link between Detroit Metropolitan Airport and downtown Detroit. It also serves as a major trade corridor, linking industrial and commercial activities across the state and nation with the international border crossings to Canada in Detroit and Port Huron, Michigan. Within the corridor, there are also access points to several tourist destinations, such as the Henry Ford museum, and industrial centers, such as the Ford Motor Company's River Rouge Plant.

The metropolitan Detroit area has become the center of a number of national special events. In July, 2005, the Major League Baseball All Star Game was played at Comerica Park in downtown Detroit. In February, 2006, the National Football League's Super Bowl XL was played at Ford Field in downtown Detroit. These two events, in addition to their related pre-event activities, other regularly scheduled special events, such as the North American International Auto Show, and general tourism industry attention to the area, brought a significant economic boost to the State of Michigan. A safe, reliable and well operating transportation system was essential to the success of these events and the area's ability to attract future events and tourism.

This section of I-94 was already scheduled to be reconstructed, due to its age and poor condition. The upcoming national special events added a sense of urgency to complete the work prior to the events, and in such a way as to not interfere with smooth traffic flow during the events. As such, MDOT considered various ways to expedite the work schedule and ensure that no construction work interrupted the flow of traffic along this corridor between the airport and downtown.

MDOT first considered more traditional methods of expediting construction schedules, but determined that they may not be as effective at achieving the objectives as the "Accepted for Traffic" incentive. A simple expedited schedule, one that defines an early completion date and specifically articulates in the progress clause that the schedule is expedited, was deemed not likely to be effective, as there would be no significant consequences for failure to complete the project on time. Traditional calendar day incentive/disincentives, A+B incentive/disincentives, or lane rental type incentive/disincentives were thought to be more effective at expediting the work; however, none would guarantee completion for any particular major event. To MDOT staff, it seemed implausible to pay an incentive to the contractor, even if the project was completed in an expedited fashion, if it was completed the day or week after a major special event. In other words, the reasons for the incentive - avoiding negative economic impacts, improving traffic flows and avoiding negative perceptions related to the special events - would not be accurately aligned with the payment of the incentive under traditional techniques.

MDOT researched other innovative contracting practices used across the country and in particular considered the concept of a "No Excuse" incentive, which MDOT piloted on a project along US-127 in Jackson County, Michigan in 2002. The concept of a "No-Excuse" bonus or incentive was based on a method used predominantly by the Florida Department of Transportation (FDOT). The concept provides an "all or nothing" incentive for completing a project by a specified date. This seemed to have promise for the I-94 project, as incentives could be tied to the specific special events of the All Star Game and Super Bowl XL.

With approval from the FHWA in 2004, MDOT developed a special provision for the "I-94 Accepted for Traffic Incentive" based on the MDOT US-127 project and FDOT contract language. This special provision was used in combination with the contract progress clause (See Appendices A and B). The special provision and progress clause established incremental "Accepted for Traffic" incentives that were based on user delay costs for the following critical milestones:

Open to Traffic "Accepted for Traffic" Incentive
July 7, 2005 $2,000,000
December 22, 2005 $2,000,000

The "Accepted for Traffic" Incentive dollar values were mutually exclusive; that is, the contractor's ability to earn the second incentive payment was independent of whether or not he met the first incentive date. Both incentive dates required completion of reconstruction work in specified stages and all lanes open to traffic. The first date was set several days before the Major League Baseball All Star Game, and the second date, prior to the Christmas holiday travel period, which was immediately followed by the North American International Auto Show and Super Bowl related events. In both instances, failure to meet the Accepted for Traffic date not only meant the incentive payment would not be made, but also imposed the assessment of daily user delay costs to encourage opening to traffic as soon as possible for the major events should the incentive date not be achieved.

The incentive amounts were determined in large part on the generally accepted practice that the maximum incentive on a project should be no more than 5% of the total construction cost. In this case, the Engineer's estimate was approximately $80,000,000, and so a total incentive of 5% or $4,000,000 was chosen. The amount was divided evenly between the two critical open to traffic dates, as the department viewed both special events to be of equal concern.

Typically, incentive projects have some relationship to estimated daily user delay costs caused by the inconvenience of the construction. While a direct derivation of user delay costs was not used on the I-94 project for this purpose, MDOT did feel that the $2,000,000 incentive for each open to traffic date was justified in relation to the estimated daily user delays. Daily user delays were computed to be in excess of $200,000 per day based on traffic volumes during normal travel days. Peak travel times during special events may result in even higher user delay costs, although there was no specific data on which to rely for this computation. The MDOT further considered the economic impact of the special events for the region, estimated by the regional convention and visitors bureau to be over $400 million. The negative impact on travel avoided by having I-94 fully open to traffic could be justified if having I-94 fully open to traffic resulted in avoidance of even a 1% decrease in economic activity, such as traveler decisions not to attend related events. This reasonable assumption further supports the determination of $4 million of incentives to ensure that the road was open to traffic.

Based on previous research for the US-127 project, MDOT learned that for the "No Excuse" Incentive projects completed in Florida one major concern by Florida contractors and FDOT staff was how to handle legitimate delays due to extra work. MDOT also solicited comments from the Michigan road building industry regarding the draft specifications, and they shared the same concerns. Specifically, it seemed unreasonable to expect the contractor to absorb the impact of a significant change in the amount or type of work after he had set a course to expedite his progress based on the original project work and completion date. However, at the same time, the completion date could not be changed, as it was attached to an event outside the control of the department.

As a result of this feedback from the construction industries in Florida and Michigan, MDOT's specification augmented the Florida specification to allow for consideration of extra work. The special provision and progress clause did not permit the extension of the "Accepted for Traffic" milestones under any circumstances. However, the special provision was written to allow for payment of extra costs to keep the project on schedule to meet the above "Accepted for Traffic" Incentive dates. The extra costs would only be eligible when a controlling item of work was affected by delays, increased quantities, or extra work that the Contractor could demonstrate was beyond their control. These terms were used on the US-127 project and helped allay fears by the construction industry that the department could add extra work in the final days before the "Accepted for Traffic" dates and thereby eliminate the possibility of the contractor being paid the incentive. However, on the US-127 project, there were no instances in which payment for acceleration was required or requested. The same terms were incorporated into the I-94 "Accepted for Traffic" provisions based on the perceived need for them and the absence of problems with their use on US-127.

Bidding Outcomes:

The special provisions and progress clause were approved in August, 2004. The project was advertised and the bids were received at a special bid letting on September 17, 2004. There were a total of three bidders, two of which were joint ventures. Two of the submitted bids were under the Engineer's estimate (9.55% and 5.65% below) and the third was 2.78% over the Engineer's estimate. In the analysis of the bids, there was no evidence of irregular bids or material unbalancing.

The contract was awarded to the lowest responsive bidder at an amount of $75,638,397.91, which was 9.55% ($7,983,533.91) under the Engineer's estimate of $83,621,931.82. There were no formal complaints or issues regarding the innovative contracting provisions raised by Contractors during the advertising and letting of the contract.

Evaluation of the Bidding Outcomes:

Based on the analysis of the bids, there is no evidence that the "Accepted for Traffic" Incentive provisions had any unacceptable affects on the bidding process for the I-94 project. A sufficient number of contractors bid on the project, and all bids were less than or within an acceptable range of the approved Engineer's estimate. There was no evidence of unbalancing or other irregularities in the bid prices. Therefore, it can be concluded that the risk associated with the "Accepted for Traffic" Incentive provisions was not significant enough to dissuade contractors from bidding on the project; nor did contractors feel compelled to build significant extra costs into their bids to account for any risk associated with the "Accepted for Traffic" Incentive.

In addition to analysis of the bids, MDOT developed a five question survey regarding the impact of the "Accepted for Traffic" Incentive provisions on the bidding process in order to obtain more specific feedback from the construction contracting industry. The survey form can be found in Appendix C. The survey was distributed in the spring of 2005 to the low bidder and their primary subcontractor for paving and to the four firms involved in the two unsuccessful bidding joint ventures. A total of 5 responses were received, from everyone except the primary subcontractor of the successful low bidder. The compiled survey results can be found in Appendix D.

All respondents agreed that the "Accepted for Traffic" Incentive caused them to approach the preparation of their bids differently than they would have for a non-expedited type of project. In general, this meant they put more effort into determining their work schedule, labor needs and coordination of subcontractors. In one response, from an unsuccessful bidder, there was a thought that subcontractors increased their quotes to cover the higher risk. Another unsuccessful bidder noted that the incentive was so high that it required the contractor to plan to achieve it, and consequently to lower his bid by the incentive amount so as to bid more competitively. The contractor had to anticipate that the costs associated with accelerating the work will be returned to him during the contract through the incentives, and therefore not treat the incentive as a "bonus".

All respondents indicated that the "Accepted for Traffic" Incentive caused them to approach the preparation of their bids differently than they would have compared to other contracts with more traditional acceleration provisions and incentives. Again, the attention to schedule in the bidding process was a key aspect of how this bidding process differed. The unsuccessful bidders again noted the high risk being placed on the contractor and one of them noted the judgment call that had to be made on whether or not to remove the acceleration cost from their bid in order to be competitive, assuming they would achieve full incentive.

All respondents agreed that the incentive amounts, $2 million for the July 7th open to traffic date and another $2 million for the December 22nd open to traffic date, were sufficient to warrant the effort to accelerate the schedule. One unsuccessful bidder noted that the incentive was too big. With such a high value, he noted that the incentive amount only represents risk to the contractor and not any true incentive. This respondent also felt that the number of bidders was reduced because of the high incentive amount, since this risk level would be a "company killer" for some firms if the incentive was not achieved.

This suggests that this type of incentive favors the larger contractors who can assume more risk in the preparation of their bids. It should be noted again that two of the three bidders were joint ventures. This may have occurred as a result of the high incentive dollar amount and risk associated with the "all or nothing" aspect of the "Accepted for Traffic" Incentive. It would appear that the contractors who formed joint ventures for this bid were trying to spread the risk across more than one prime firm. It should also be noted that both joint ventures were unsuccessful, perhaps indicating a higher degree of uncertainty with being able to deal with the risk associated with the "Accepted for Traffic" Incentive.

In general, the respondents indicated that the specifications for the "Accepted for Traffic" Incentive were clear, and were about as clear as other types of incentive provisions. There was one comment that the definition of "completion of all work" was not clear enough and needed to be more specific, i.e. did it include punch list items, extra work, etc.

Other comments offered by all the respondents pointed more towards the contractors' concerns that the language, while clear, was not fair. The "all or nothing" aspect and the possibility of a last minute change in work, weather conditions or interpretation by the project engineer put the contractor in an unfair position even though he may have put forth adequate effort to accelerate the work in order to substantially meet the open to traffic objectives.

Construction Outcomes:

The contract was awarded to Dan's Excavating, Inc. on October 7, 2004. The contractor began project work on October 7, 2004 and placed permanent lane closures on December 14, 2004, thus commencing the "Accepted for Traffic" period. The contractor's progress schedule clearly indicated from the beginning of the contract his intent to achieve the "Accepted for Traffic" dates and incentives. He mobilized sufficient manpower and equipment to accelerate the work beyond normal production rates.

The contractor opened the roadway to all lanes of traffic on July 7, 2005, thus meeting the first "Accepted for Traffic" date and incentive payment. There was not a need to invoke the clauses of the special provision to accelerate any extra work to achieve this open to traffic date. The roadway remained open for the Major League All Star Game and associated activities, and allowed for smooth traffic flow during this event. The road construction received little or no attention from the media during this time, making the project work a "non-event", and achieving the objectives of the department. The contractor resumed work on July 14, 2005, placing new permanent lane closures for the second major stage of the work.

The contractor opened the roadway to all lanes of traffic on December 22, 2005, thus meeting the second "Accepted for Traffic" date and incentive payment. There was not a need to invoke the clauses of the special provision to accelerate any extra work to achieve this open to traffic date. Therefore, the roadway was unobstructed by construction for the North American International Auto Show and the National Football League's Super Bowl XL and associated activities and allowed for smooth traffic flow during these events, thus achieving the objectives of the department.

There were no formal complaints or issues regarding the innovative contracting provisions raised by Contractors during the construction phase of the contract.

Evaluation of the Construction Outcomes:

Based on the construction outcomes, it can be concluded that the "Accepted for Traffic" Incentive was effective at encouraging the contractor to accelerate the work and achieving the open to traffic outcomes desired by the department. The value and structure of the incentive was such that the outcomes were physically achievable, financially feasible, and sufficiently risk averse that the contractor was willing and interested to pursue the incentive.

In addition to analysis of the construction outcomes, MDOT developed a ten question survey regarding the impact of the "Accepted for Traffic" Incentive provisions on the construction process in order to obtain more specific feedback from the contractor and key staff responsible for executing the contract. The survey form can be found in Appendix E. The survey was distributed in the summer of 2006 to the prime contractor and their primary subcontractor for paving and to the Resident Engineer, his assistant and his senior inspector for the project. A total of 4 responses were received, from everyone except the primary subcontractor. The compiled survey results can be found in Appendix F.

All respondents agreed that the "Accepted for Traffic" Incentive caused the contractor to take proactive steps to accelerate the work and achieve the incentive. In general, this meant the contractor worked longer hours, used additional crews and additional or different equipment to accelerate the work. All respondents agreed that the contractor started the project from the beginning with the intent of achieving the full incentive. The contractor indicated that they investigated various staging alternatives at the outset to accelerate work in various areas of the project. Specifically, this included constructing the clay grade during winter months, so as to get a jump start on warm weather activities.

All respondents indicated that the conditions of the "Accepted for Traffic" Incentive still allowed adequate time for effective decision making, although it did require the MDOT staff and contractor to work closely together to come up with immediate solutions. In general, the respondents said that the decision making process under the "Accepted for Traffic" incentive provisions was the same or better than under traditional calendar day incentives, A+B incentives and lane rental provisions.

All respondents agreed that the "Accepted for Traffic" incentive resulted in administrative costs that were the same as any type of incentive or accelerated construction work.

When asked how the "Accepted for Traffic" Incentive affected the relationship between MDOT and the prime contractor, both the contractor and the Resident Engineer felt the relationship remained positive, and encouraged quick decisions and responses. However, the senior inspector noted that the provisions had a negative affect on the inspectors, placing considerable pressure on them to not delay the contractor in any way. In comparison to other acceleration and incentives techniques, the respondents had varied opinions on how the "Accepted for Traffic" Incentive affected the relationship between MDOT and the prime contractor, in several cases indicating that it was worse than traditional incentive contracts.

The respondents again had mixed impressions of how the "Accepted for Traffic" Incentive affected the quality of the construction. The contractor and Resident Engineer felt that it had no impact, but the inspector felt it had a negative affect. In general they all agreed that the impact on quality was the same as other acceleration and incentive techniques, except that two respondents felt it was worse than traditional calendar day incentives.

There were also mixed responses in regards to how the "Accepted for Traffic" Incentive impacted safety of the work zone. Two of the four respondents felt there was no impact, one felt it was negative, and the last thought it was positive, because traffic was maintained for shorter periods in the construction zones. When compared to other types of incentives, the respondents generally agreed that the "Accepted for Traffic" Incentive had about the same affect in regards to work zone safety.

Considering the impact the "Accepted for Traffic" Incentive had on the productivity and effectiveness of the contractor's workers, there was again mixed reaction. While the Resident Engineer felt the incentive provision encouraged better staffing, the contractor and senior inspector noted a decrease in productivity and an increase in poor attitudes and grief over the life of the project. This impact was deemed by the respondents to be the same or worse than other typical incentive contracts.

In the opinion of the respondents, the "Accepted for Traffic" Incentive had a similar affect on the MDOT staff, decreasing productivity and increasing stress as the project progressed, although the senior inspector did note that the shorter overall duration helped balance that impact. Again, the impact on productivity and effectiveness was viewed as the same or worse than typical incentive contracts.

Other comments offered by the respondents reinforced these mixed feelings and the perception that a balance must be struck between the benefits of accelerating the work, the risks associated with holding to quality construction standards, and the high pressure working conditions that incentives can create.

Conclusions:

This report has documented the results of an innovative contracting method used by the Michigan Department of Transportation called an "Accepted for Traffic" Incentive on a reconstruction project along I-94 in Wayne County, Michigan. The concept was developed based on research about innovative contracting practices used on other projects in Michigan and by other states. MDOT prepared specifications which modified a model developed in Florida to include provisions for allowing extra compensation to accelerate work in the event of legitimate extra work from unforeseen conditions without compromising the "Accepted for Traffic" Incentive completion dates. Based on the bidding and construction outcomes and survey information from the bidders, the prime contractor, and key MDOT staff, the "Accepted for Traffic" Incentive appears to have achieved the objective of this innovative contracting method.

This innovative contracting method was selected because it was extremely important for MDOT to meet the critical open to traffic dates and have traffic flowing uninterrupted for the key special events of the Major League Baseball All Star Game and the National Football League's Super Bowl XL. As a result of the "Accepted for Traffic" Incentive provisions, it was clear that all bidders recognized the importance of these dates and spent more time planning their work schedules and resource allocation during the bidding phase, which is a desirable affect from the owner's perspective for a high profile project such as this. The prime contractor developed an accelerated schedule from the start of the project. He mobilized additional crews and equipment and opened the roadway for traffic in advance of the key dates, thus earning the full incentive established in the contract.

All of the bids were in an acceptable range of the Engineer's estimate; however, all contractors uniformly commented that they thought the "Accepted for Traffic" Incentive provisions were unfair to the contractor by placing so much risk for last minute changes in work, weather, or the engineer's interpretation that would negate the incentive that they planned to achieve. This was perceived to be a very high degree of risk for the contractors, although apparently not so high that they were unwilling to bid on the project.

It appeared that the contractors managed this high degree of risk by intentionally planning to meet the open to traffic dates so as to achieve the full incentive amounts. They then reduced their bid amounts by this incentive amount so as to bid more competitively on the project. This is generally an unconventional approach to bidding highway construction projects. From the owner's perspective, this is not necessarily a negative outcome, as the key objective of being open to traffic for the special events becomes paramount to the contractor, as his planned schedule and cost structure is geared to meeting the specified open to traffic dates. However, the bid prices do not truly reflect the cost of the work in this scenario. Only the final contract cost with the incentives paid would reflect the true costs.

It also appeared that only one bidder was either a large enough company or comfortable enough to shoulder that entire risk by himself. The other two bidders, both unsuccessful, were joint ventures, presumably formed to be able to spread the risk across the assets of two companies. If used on a regular basis, the "Accepted for Traffic" Incentive could have a long term negative affect on the industry as a whole. It would not be in the public's best interest to effectively exclude viable contractors of smaller size from construction work due to the high risk associated with this type of incentive. Therefore, such an incentive should probably be used only in select situations where the public interest relative to economic impact or key open to traffic dates is high enough to outweigh the possibility this contracting method has to favor larger contractors who are capable of assuming higher degrees of financial risk.

Through proactive planning, the prime contractor was able to effectively accelerate his schedule and mobilize sufficient labor and equipment to open the roadway to traffic for the specified dates and thus achieve the full incentive payments. While the "Accepted for Traffic" Incentive provisions proved to be effective in achieving this outcome, according to key staff on the project, it did put a significant amount of stress on inspectors and the contractor's staff, especially as time went along during the project. There were mixed feelings about how the provisions affected the quality of the workmanship and the safety of the work zone. However, the respondents to the survey felt the "Accepted for Traffic" Incentive provisions had little or no impact on decision making during construction, administrative costs for the contractor or MDOT, and the relationships between the contractor and MDOT, at least as compared to other acceleration techniques and traditional types of incentive provisions.

Contacts:

Tony Kratofil, P.E.
Michigan Department of Transportation
Deputy Region Engineer - Metro Region
(248) 483-5102
kratofilt@michigan.gov

APPENDICES

Appendix A. Special Provision for "Accepted for Traffic" Incentive from the I-94 Project.

Michigan Department of Transportation Bureau of Highways
Special Provision for I-94 Accepted for Traffic Incentive

METRO: WRE 1 of 4 08/06/04

a. Description. The Department will pay the Contractor a Lump Sum Incentive if the work in the contract is Accepted for Traffic on or before the Accepted For Traffic Incentive Dates specified in the contract progress clause and subject to the conditions set forth below.

"Accepted for Traffic" for the July 7, 2005 Incentive Date shall mean completing all contract work required for Stage 3/ 3a, making both eastbound and westbound I-94 suitable for three lanes of traffic, and providing all access required by the plans and Maintaining Traffic Special Provision for the period from July 8, 2005 to July 13, 2005 (Stage 4).

"Accepted for Traffic" for the December 22, 2005 Incentive Date shall mean completing all contract work with the exception of landscaping, Stage 5/ 5a/ 6 slope restoration, and Stage 5/ 5a/ 6 permanent pavement markings, and making all lanes and shoulders (including ramps and affected local roads), suitable for use by traffic.

The Accepted for Traffic Incentive Dates indicated in the contract progress clause will not be adjusted for any reason, cause, or circumstance whatsoever, regardless of fault, save and except in the instance of a catastrophic event (i.e., natural disaster or a declared state of emergency).

The parties anticipate that delays may be caused by or arise from any number of events during the course of the contract. These include, but are not limited to, work performed, work deleted, change orders, supplemental agreements, delays, disruptions, differing site conditions, utility conflicts, design changes or defects, time extensions, Extra Work, right of way issues, permitting issues, actions of Suppliers, Subcontractors or other Contractors, actions by third parties, shop drawing approval process delays, expansion of the physical limits of the project to make it functional, weather, weekends, holidays, suspension of the Contractor's operations, or other such events, forces or factors sometimes experienced in highway construction work.

Such delays or events and their potential impacts on performance by the Contractor are specifically contemplated and acknowledged by the parties entering into this Contract, and shall not be grounds for extending the Accepted for Traffic Incentive Dates indicated in the contract progress clause.

Extensions of Time for impacts to the contract and the contract completion date will be allowed per Subsection 108.09 of the 2003 Standard Specifications for Construction, but no extensions will be allowed for the Accepted for Traffic Incentive Dates indicated in the contract progress clause.

Additional compensation for costs incurred by the Contractor required to keep the project on schedule to meet the Accepted for Traffic Incentive Dates may be allowed for schedule delays, increased quantities, and Extra Work subject to the following conditions. For the purpose of the following, the term "Major Item of Work" shall be as defined in Subsection 101.03 of the 2003 Standard Specifications for Construction.

Cost Increases due to Schedule Delays

Cost increases due to schedule delays will be considered if the delays relate to a Major Item of Work, affect completion of the controlling operation as defined in the Contractor's approved Critical Path valid at the time of the delay, the delays are not the fault of the Contractor, the increased costs are necessary to meet the Accepted for Traffic Incentive Dates in the progress clause, and one or more of the following conditions are met:

  1. Right-of-way or right-of-entry required to perform the controlling operation was not available when stipulated in accordance with the contract provisions.
  2. Utilities were not moved as indicated in the contract documents and the presence of these utilities created a delay in the controlling operation.
  3. Other related contracts were not completed to a point where construction on the controlling operation could proceed
  4. Suspension of the work ordered by the Engineer for reasons not provided for in the contract.

The Contractor must also fully justify the additional costs required to keep the project on schedule without any adjustment in the Accepted for Traffic Incentive Dates. Only actual direct costs above those which would be necessary to complete the work will be considered. Examples of such actual direct cost increases include but are not limited to, concurrent work operations, additional personnel, additional work shifts, overtime, and 24 hour work days.

These cost increases must also be fully justified by the Contractor and approved by the Engineer prior to performing the work involving the delay. No cost increase will be allowed for overhead. Failure of the Contractor to meet any of the above requirements and provide the required justification, will result in no payment being made for additional costs incurred to keep the project on schedule because of the alleged delay.

Cost Increases for Increased Quantities

Cost adjustments for quantity increases required to meet the Accepted for Traffic Incentive Dates will be considered if the increases are to a Major Item of Work, the increase affects completion of the Contractor's controlling operation(s) as defined in the Contractor's approved Critical Path valid at the time the quantity increase occurs, the quantity increase is required to meet the Accepted for Traffic Incentive Date(s), and the quantity increase qualifies as a Significant Change as defined in Subsection 103.02 B of the 2003 Standard Specifications.

The Contractor must demonstrate that the quantity increase meets the Significant Change criteria as it relates to the controlling operation. The Contractor must also fully justify the adjusted unit price due to the quantity increase relative to keeping the project on schedule without any change in the Accepted for Traffic Incentive Date (s). Only actual direct costs above that which would be necessary to complete the work will be considered. Examples of such actual direct costs include, but are not limited to, concurrent operations, additional personnel, additional shifts, overtime, and 24-hour work days.

These cost adjustments must be fully justified by the Contractor and approved by the Engineer prior to performing the work involving the quantity increase. No cost adjustment will be allowed for overhead. Failure of the Contractor to meet these requirements and provide the justification as stated herein will result in no additional payment of any cost adjustment related to increased quantities to meet the Accepted for Traffic Incentive dates.

Cost Increases for Extra Work

Extra Work shall be as defined in Subsection 101.03 of the 2003 Standard Specifications for Construction. Cost increases for Extra Work will be allowed if the Extra Work is required to complete a Major Item of Work, the Major Item of Work is shown to affect the controlling operation as defined in the Contractor's approved Critical Path valid at the time the Extra Work is to be done, and the Extra Work is required to meet the Accepted for Traffic Incentive Date (s) shown in the progress clause.

The Contractor must bear the burden to fully justify the cost of any Extra Work prior to performing the Extra Work, including additional cost relative to keeping the project on schedule without any adjustment in the Accepted for Traffic Incentive Date(s). Examples of additional costs for Extra Work that will be considered are costs for concurrent operations, additional equipment, additional personnel, additional shifts, overtime, longer work days, longer work weeks, or any other means that affect the Extra Work unit price.

Failure to provide the Engineer with justification for the additional costs of Extra Work, and failure to reach agreement on the price for the Extra Work prior to undertaking the Extra Work, will result in the Contractor being paid for the Extra Work by force account. If the Contractor is being paid for by force account, the Contractor will not receive any payment for additional costs to keep the project on schedule because of the Extra Work.

As conditions precedent to the Contractor's entitlement to any Accepted for Traffic Incentive, the Contractor must make the project "Accepted for Traffic" and open the project to traffic in accordance with the contract provisions on or before the Accepted for Traffic Incentive Dates in the progress clause. "Accepted for Traffic" will be as determined by the Engineer in accordance with the Standard Specifications and this document, and the Contractor shall obtain approval from the Engineer before the project can be considered "Accepted for Traffic."

The determination regarding whether or not the Contractor meets the Accepted for Traffic Incentive Dates will be made separately for each of the two dates provided in the contract progress clause. The Contractor is eligible for an incentive payment for making the project "Accepted for Traffic" on or before either of the two Accepted for Traffic dates in the contract progress clause.

The Contractor shall have no right to any payment whatsoever under this Special Provision, if the Accepted for Traffic dates in the contract progress clause are not met.

Should this provision conflict with any other provision of the contract, the contract shall be interpreted in accordance with this provision.

b. Measurement and Payment. The Contractor shall be paid an Accepted for Traffic Incentive for making the project "Accepted for Traffic" as described in the second and third paragraphs of this special provision, by the dates indicated in the contract progress clause. These incentives will be paid using the followingcontract items (pay items).

Contract Item (Pay Item) Pay Unit
Accepted for Traffic Incentive (July 7, 2005) Dlrs
Accepted for Traffic Incentive (December 22, 2005) Dlrs

Appendix B. Progress Clause from the I-94 Project.

Progress Clause: Start work within five (5) calendar days after receiving Notice of Award, or on the date agreed upon with the Engineer. In no case, shall any work be commenced prior to receipt of formal notice of award by the department.

This project is on an expedited schedule. The Contractor is expected to mobilize sufficient personnel and equipment and to work the required overtime to maintain the expedited schedule. It is anticipated that seven day work weeks will likely be required during the life of this contract, and that work during the winter months will be necessary to meet the project schedule.

There will be no seasonal suspension of work activities during the winter. The Contractor is responsible for all means to protect the work from the weather, and for all costs associated with cold weather construction. All costs of cold weather construction and complying with the requirements of the 2003 Standard Specifications for Construction for working during cold weather and on wet and frozen ground, shall be included in the Contractor's bid for the applicable items of work.

Additionally, the Contractor shall be required to continually monitor the in-place concrete temperatures in the field throughout curing to ensure the concrete does not freeze and achieves adequate strength gain.

Contract work shall be completed according to the following schedule:

1-The project shall be "Accepted for Traffic" as defined in the Special Provision for I-94 Accepted for Traffic Incentive, by July 7, 2005.

2- Slope Restoration associated with Stage 3/ 3a shall be completed by July 7, 2005.

3-The project shall be "Accepted for Traffic" as defined in the Special Provision for I-94 Accepted for Traffic Incentive, by December 22, 2005.

4- Stage 5/ 5a/ 6 slope restoration and Stage 5/ 5a/ 6 permanent pavement markings shall be completed by May 15, 2006.

5- Landscaping shall not begin until 2006, and shall be completed by September 19, 2007.

6- The entire contract shall be completed by September 19, 2007.

Failure to complete the work specified in number 1 above by the July 7, 2005 will result in the assessment of user delay costs of $100,000 per day from July 8, 2005 to July 13, 2005, inclusive. Failure to complete the work specified in number 3 above by December 22, 2005 will result in the Contractor being assessed user delay costs of $20,000 per day until the work is completed.

Failure to complete the work specified in numbers 2, 4, 5, and 6 above by the dates indicated, will result in the assessment of liquidated damages in accordance with subsection 108.11 of the 2003 Standard Specifications for Construction.

Additionally, the Department will pay the Contractor a lump sum incentive in the amount of $2,000,000.00 if the Contractor makes the project "Accepted for Traffic" as defined in the I-94 Accepted for Traffic Incentive Special Provision, on or before the July 7, 2005 Accepted for Traffic date.

The Department will also pay the Contractor a lump sum incentive in the amount of $2,000,000.00 if the Contractor makes the project "Accepted for Traffic" as defined in the I-94 Accepted for Traffic Incentive Special Provision, on or before the December 22, 2005 Accepted for Traffic date.

Additionally, the Contractor must take two mandatory safety breaks in 2005, each two days in duration. The dates for these breaks shall be agreed on with the Engineer and shown on the Contractor's Critical Path Network.

During the Easter (4/8/05- 4/10/05), Thanksgiving (11/23/05- 11/27/05), and Christmas (12/22/05- 12/26/05) holidays, no additional lane closures (other than permanent lane closures already in place for staging) are allowed and the Contractor's work operation shall not interfere with the through movement of traffic.

The following provisions also apply to this contract:

1-The low bidder (s) for the work covered by this proposal will be required to meet with Department representatives to work out a detailed progress schedule. The Region Engineer will arrange the time and place for the meeting. The named subcontractors for Designated and/ or Specialty Items, as shown in the proposal, are recommended to be at the scheduled meeting if such items materially affect the work schedule.

2-The progress schedule shall be in accordance with the applicable contract provisions. The two Accepted for Traffic dates contained in this progress clause shall be shown, as well as the contract completion date.

3- The low bidder (s) will be required to submit a Critical Path Method (CPM) network schedule to the Engineer for approval prior to beginning work. The Critical Path shall meet the requirements of the Special Provision for Critical Path Network Schedule (03P102C).

4- All local noise and dust ordinances shall apply to this project.

Appendix C. Initial Survey Form.

"Accepted For Traffic" Incentive Questionnaire

Date: March 10, 2005
Contract ID: IM 82022-45684A
MDOT Item No.: 0409-601
Federal Project: IM0482(127)
Federal Item: KK1359
Project Description: 6.02 miles of reconstruction of mainline and ramps, drainage work, signing, lighting, concrete barrier wall, valley gutter, patching and diamond grinding on I-94 from Pelham Road to Wyoming Avenue with 20 bridge reconstructions in the cities of Dearborn, Allen Park and Detroit, Wayne County, Michigan.
Prime Contractor: Dan's Excavating, Inc.
Owner Agency: Michigan Department of Transportation
Project Engineer: Brian Scharboneau, P.E., Delivery Engineer - Taylor TSC

The purpose of this questionnaire is to evaluate the effectiveness of the "Accepted for Traffic" incentive provisions used to accelerate the progress of the subject highway construction project. The results may be shared with other transportation agencies or used to improve the concept of "Accepted for Traffic" incentives for future applications. Thank you for your time in providing this valuable feedback.

Completed by: Name: (optional)

Organization:

Date:

1. a. Did the concept of the "Accepted for Traffic" incentive provision cause you as a bidder to approach the preparation of your bid differently than for a normal (non-expedited) construction schedule? ( Y / N )

b. If Yes, what difference in approach did you take?

2. a. Did the concept of the "Accepted for Traffic" incentive provision cause you as a bidder to approach the preparation of your bid differently than for other typical accelerated construction schedules with incentives? ( Y / N )

b. If Yes, what difference in approach did you take?

3. Were the incentive amounts sufficient to warrant an effort to accelerate the schedule to achieve the "Accepted for Traffic" dates? ( Y / N ) If No, please explain.

4. a. Were the specifications for the "Accepted for Traffic" incentive sufficiently clear to prepare your bid? ( Y / N ) If No, please explain.

b. How would you rate the clarity of the "Accepted for Traffic" incentive provisions to your experience with other incentive/disincentive provisions? (Please circle your ratings below.)

Traditional Calendar Day I/D   More Clear Same Less Clear
A+B Calendar Day Incentive More Clear Same Less Clear
Lane Rental More Clear Same Less Clear

5. Are there any other thoughts you have on the positive or negative aspects of the "Accepted for Traffic" incentive provisions (including the Progress Clause) as it relates to the bidding of the subject project?

Appendix D. Initial Survey Compiled Results.

Accepted for Traffic Incentive Compiled Initial Survey Results I-94 Reconstruction from Pelham Rd to Wyoming Ave, Wayne County, Michigan
Survey Questions: Successful Low Bidder Response   Unsuccessful Bidder 1 Joint Venture Contractor 1 Response Unsuccessful Bidder 1 Joint Venture Contractor 2 Response Unsuccessful Bidder 2 Joint Venture Contractor 1 Response Unsuccessful Bidder 2 Joint Venture Contractor 2 Response
1. a) Did the concept of the "Accepted for Traffic" incentive provision cause you as a bidder to approach the preparation of your bid differently than for a normal (non-expedited) construction schedule? Y / N Yes.   Yes Yes Yes Yes
1. b) If Yes, what difference in approach did you take? "Accepted for Traffic" incentive provision requires more pre-bid schedule coordination than normal (non-expedited) construction projects.   Schedule Review, Increase in Work force or overtime needs We prepared a detailed construction schedule and spent more time prior to the bid with our sub-contractors to make sure all bidders had a complete scope and understanding of the work and time allowed to perform the work. This was basically a NO Excuse type of clause. There are too many unknowns and items not in the control of the contractor. This is a high risk clause depending on the amount of money involved. If things go wrong on a project through no fault of the contractor, a company could go bankrupt. With the incentive amount of $2 million for each date, we had to insure we met the accepted for traffic date and I think our subcontractors added money to t heir quotes making us noncompetitive in the bid. You have to decide whether to take the incentive out of your cost. Because it is all or nothing and the disincentives are high, you almost have to take the incentive. This now means you have to get because the money is out of cost It is not a "Bonus" as many think
2. a) Did the concept of the "Accepted for Traffic" incentive provision cause you as a bidder to approach the preparation of your bid differently than for other typical accelerated construction schedules with incentives? Y / N Yes.   Yes Yes Yes Yes
2. b) If Yes, what difference in approach did you take? Pre-bid CPM schedules were developed to assist our team in determining that the "Accepted for Traffic" dates required by the contract were attainable.   Same It is impossible to allow in our bid, the lost of delays beyond the contractors' control. With the "No Excuses" clause in the special provisions the contractor is taking risk beyond its control On this job, with such large disincentive the schedule must be met. Since the schedule has to be met, the incentive will be earned. If you know you will earn the incentive, then you have to make a judgment to keep the money in the bid or take the money out of the bid in order to stay competitive. This concept favors the largest contractors as they can shoulder more risk. Because this is all or nothing, it is not paid by the day. You are taking a large amount out of your bid.
3. a) Were the incentive amounts sufficient to warrant an effort to accelerate the schedule to achieve the "Accepted for Traffic" dates? Y / N Yes.   Yes Yes   Yes
If No, please explain. NA       The incentive money was way too high. If the contractor decides to remove the money from the bid to stay competitive, then the value of the incentive money only represents risk and not any true incentive. The number of bidders was reduced because the incentive amounts were so large and bidders knew the money had to come out of their bids, thus making the bid a potential company killer if the incentives were not achieved irregardless of who was at fault.  
4. a) Were the specifications for the "Accepted for Traffic" incentive sufficiently clear to prepare your bid? Y / N Yes.   See comments at end of questionnaire. No Yes No
In No, please explain.       The Special Provisions state "completing all contract work with the exception of landscaping. This language leaves a lot of discretion of contract work. Does this mean final acceptance including punch list. Delays or changes, extra work? We did not have any problem understanding the provision where as we often have problems with others. The problem is because it is all or nothing. An inspector, engineer could make 1 minor thing mean job not accepted to pay incentive.
4. b) How would you rate the clarity of the "Accepted for Traffic" incentive provisions to your experience with other incentive/disincentive provisions?            
Traditional Calendar Day I/D Same.   More Clear Same Less Clear   Same
A+B Calendar Day Incentive Same.   More Clear Same Less Clear   Same
Lane Rental More Clear.   More Clear Same Less Clear   More Clear
5. Are there any other thoughts you have on the positive or negative aspects of the "Accepted for Traffic" incentive provisions (including the Progress Clause) as it relates to the bidding of the subject project? We feel that the simple requirement of the full width opening of a specified number of traffic lanes per roadway direction, with allowable minimums of lanes required for traffic maintenance during construction, is less confusing than lane rental provisions. We feel that the A+B Calendar Day incentive provisions are fairer to the contractor than the drop dead dates for incentive. Missing a drop dead date by a matter of hours due to last minute inclement weather (that won't allow for pavement markings for example), after the contractor has expended his resources is patently unfair.   Page 2 of 4-3rd paragraph, 2nd line should have the work "may" changed to "will". May is not definite. Page 2 of 4, 1st paragraph of Cost Increases due to Schedule Delays the word "or" needs to be placed after "Major Item of Work". Based on the definition of Major item of Work, a controlling operation of the critical path is not necessarily a major item of work. The word "or" needs to be placed between each of the parameters establishing the justification. In the 4th paragraph of the same section, prior justification and approval must be granted. This requirement is not reasonable or possible on highly expedited schedules; the MDOT process does not provide for this to happen. Notification of intent and ongoing discussion to agreement should be a requirement on both parties. Page 3 of 4 -Cost Increases for Increased Quantities, 1st paragraph, Non-major items of work have had quantities been in place within the original proposal. The definition of major item needs to incorporate those items that meet the definition based on final quantities. Third paragraph, the requirement for approval and justification prior to performing of work does not equate to the terms expedited or accelerated. See previous comment. This no excuse language requires the contractor to add cost to their bid to allow for factors that would not normally be added. There is a great potential for disputes between the department and contractors of what is final acceptance. When the contractor says or when the department formally accepts. When $2 million dollars are at stake based on one calendar day, it creates disputes. An incentive of $500,000 per stage would have been more than adequate for this schedule. The majority of contracts of this size seem to be tailored to a select few contractors, and therefore these contractors control the majority of the MDOT budget in the highway market. In general we believe the No Excuse provisions are unfair and cost MDOT far more than it realizes due to reduced competition. With all or nothing incentive, one minor thing that has no impact could mean no incentive. Punch list work for example. Rocks on grade, bolts loose, anything like that could lead to disagreements which is not the intent of the spec. The intent is to get the job open for the public. I don't like this type of incentive for this reason.

Appendix E. Final Survey Form. "Accepted For Traffic" Incentive Questionnaire

Date: August 17, 2006
Contract ID: IM 82022-45684A
MDOT Item No.: 0409-601
Federal Project: IM0482(127)
Federal Item: KK1359
Project Description: 6.02 miles of reconstruction of mainline and ramps, drainage work, signing, lighting, concrete barrier wall, valley gutter, patching and diamond grinding on I-94 from Pelham Road to Wyoming Avenue with 20 bridge reconstructions in the cities of Dearborn, Allen Park and Detroit, Wayne County, Michigan.
Prime Contractor: Dan's Excavating, Inc.
Owner Agency: Michigan Department of Transportation
Project Engineer: Brian Scharboneau, P.E., Delivery Engineer - Taylor TSC

The purpose of this questionnaire is to evaluate the effectiveness of the "Accepted for Traffic" incentive provisions used to accelerate the progress of the subject highway construction project. The results may be shared with other transportation agencies or used to improve the concept of "Accepted for Traffic" incentives for future applications. Thank you for your time in providing this valuable feedback.

Completed by: Name:

Organization:

Date:

Contractor
MDOT
Consultant

1. a. Did the concept of the Accepted for Traffic Incentive cause the prime contractor to take pro-active steps to accelerate the work in order to achieve the incentive(s)? ( Y / N )

b. If Yes, what types of steps did the contractor take to accelerate the work?

( Y / N ) Work longer hours.
( Y / N ) Use extra work crews.
( Y / N ) Use extra/different equipment.
( Y / N ) Other (please describe).

c. If No, why?

( Y / N ) The incentive was insufficient.
( Y / N ) It was physically not possible to accelerate the work.
( Y / N ) Other (please describe).

2. This project had various incentive dates and related incentive amounts. The contractor earned the maximum incentive amounts.

a. To your knowledge, was it the contractor's intention to achieve the maximum incentive from the start of the job? ( Y / N )

b. If so, what things did the contractor do from the beginning to make sure that the incentive was achieved?

c. What adjustments, if any, were made to stay on target to achieve the incentive?

3. a. Was there adequate time for effective decision making, given the conditions of the Accepted for Traffic Incentive? ( Y / N )

    b. If not, can you cite any examples of where decisions were negatively impacted by the conditions of the Accepted for Traffic Incentive?

c. How would you rate the impacts of the Accepted for Traffic Incentive provision on decision making relative to your experience with other incentive/disincentive provisions? (Please circle your ratings below.)

  Accepted for Traffic Incentive was...
Traditional Calendar Day I/D   Better Same Worse
A+B Calendar Day Incentive Better Same Worse
Lane Rental Better Same Worse

4. How did the Accepted for Traffic Incentive impact administrative costs for the project? Were they higher, lower, or about the same as expected for typical incentive/accelerated jobs?

5. a. Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the relationship between MDOT and the Prime Contractor?

    b. How would you rate the impacts of the Accepted for Traffic Incentive provision on the relationship between MDOT and the Prime Contractor relative to your experience with other incentive/disincentive provisions? (Please circle your ratings below.)

  Accepted for Traffic Incentive was...
Traditional Calendar Day I/D   Better Same Worse
A+B Calendar Day Incentive Better Same Worse
Lane Rental Better Same Worse

6. a. Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the quality of the construction?

    b. How would you rate the impacts of the Accepted for Traffic Incentive provision on the quality of the construction relative to your experience with other incentive/disincentive provisions? (Please circle your ratings below.)

  Accepted for Traffic Incentive was...
Traditional Calendar Day I/D   Better Same Worse
A+B Calendar Day Incentive Better Same Worse
Lane Rental Better Same Worse

7. a. Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the safety of the work zone?

    b. How would you rate the impacts of the Accepted for Traffic Incentive provision on the safety of the work zone relative to your experience with other incentive/disincentive provisions? (Please circle your ratings below.)

  Accepted for Traffic Incentive was...
Traditional Calendar Day I/D   Better Same Worse
A+B Calendar Day Incentive Better Same Worse
Lane Rental Better Same Worse

8. a. Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the productivity and effectiveness of contractor staff?

    b. How would you rate the impacts of the Accepted for Traffic Incentive provision on the productivity and effectiveness of contractor staff relative to your experience with other incentive/disincentive provisions? (Please circle your ratings below.)

  Accepted for Traffic Incentive was...
Traditional Calendar Day I/D   Better Same Worse
A+B Calendar Day Incentive Better Same Worse
Lane Rental Better Same Worse

9. a. Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the productivity and effectiveness of MDOT/Consultant Engineering, Inspection and Administrative staff?

    b. How would you rate the impacts of the Accepted for Traffic Incentive provision on the productivity and effectiveness of MDOT/Consultant Engineering, Inspection and Administrative staff? (Please circle your ratings below.)

  Accepted for Traffic Incentive was...
Traditional Calendar Day I/D   Better Same Worse
A+B Calendar Day Incentive Better Same Worse
Lane Rental Better Same Worse

10. Are there any other thoughts you have on the positive or negative aspects of the Accepted for Traffic incentive provisions?

Appendix F. Final Survey Compiled Results.

Accepted for Traffic Incentive Compiled Initial Survey Results I-94 Reconstruction from Pelham Rd to Wyoming Ave, Wayne County, Michigan
Survey Questions: Successful Low Bidder Response   Resident Engineer Response Assistant Resident Engineer Response Senior Project Inspector Response  
1. a)   Did the concept of the Accepted for Traffic Incentive cause the prime contractor to take pro-active steps to accelerate the work in order to achieve the incentive(s)? Y / N Yes.   Yes Yes Yes  
1. b) If Yes, what steps did the contractor take to accelerate the work? Work longer hours. Use extra work crews. Use extra/different equipment. Other (please describe). All of the above.   All of the above. All of the above. Work longer hours; use extra crews.  
1. c) If No, Why? The incentive was insufficient. It was physically not possible to accelerate the work. Other (please describe). N/A   N/A N/A N/A  
2. a) The project had various incentive dates and related incentive amounts. To your knowledge, was it the contractor's intention to achieve the maximum incentive from the start of the job? Yes.   Yes. Yes. Yes.  
2. b) If so, what things did the contractor do from the beginning to make sure the incentive was achieved? Investigated various staging changes to accelerate work in various areas.   Weekend work, long weekdays. Worked their people and subs (subcontractors) difficult hours. Following a tight progress schedule and work in all weather conditions.  
2. c) What adjustments, if any, were made to stay on target to achieve the incentive? Add hours, add days/week, add crews, etc.   Any and all necessary to achieve milestone dates. No adjustment necessary. Dan's ran full tilt all of the time. Work on constructing clay grade in winter months in order to accelerate schedule.  
3. a) Was there adequate time for effective decision making, given the conditions of the Accepted for Traffic Incentive? (Y / N) Yes.   Yes. Yes. Yes.  
3. b) If not, can you cite any examples of where decisions were negatively impacted by the conditions of the Accepted for Traffic Incentive? N/A   Only if MDOT staff and contractor worked together to come up with immediate solutions. Design consultant had to also react in a very timely manner. Specifications, at times, are compromised near the end of construction season. Predominantly painting and pavement marking issues. Also with slope restoration.    
3. c) How would you rate the impacts of the Accepted for Traffic Incentive provision on decision making relative to your experience with other incentive/disincentive provisions?            
Traditional Calendar Day I/D Better.   Better Better Better  
A+B Calendar Day Incentive Same.   Same Worse Better  
Lane Rental Better.   Same Same Better  
4. How did the Accepted for Traffic Incentive impact administrative costs for the project? Were they higher, lower, or about the same as expected for typical incentive/accelerated jobs? About the same.   Same as high incentive/disincentive jobs. Same. About the same as any incentive project.  
5. a) Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the relationship between MDOT and the Prime Contractor? As expected - it created several stressful situations. However, the overall relationship stayed positive.   Positive for quick decisions and contractors quick responses. No impact. Negative. Inspectors for MDOT received much grief if they delayed operations in any way.  
5. b) How would you rate the impacts of the Accepted for Traffic Incentive provision on the relationship between MDOT and the Prime Contractor relative to your experience with other incentive/disincentive provisions?            
Traditional Calendar Day I/D Worse.   Better Same Worse  
A+B Calendar Day Incentive Same.   Same Same Worse  
Lane Rental Worse. (Depends on rental criteria.)   Better Same Same  
6. a) Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the quality of the construction? No impact.   No difference vs. A+B projects. Positive & negative. Negative. Forcing completion of any work items early causes accepting less than average quality.  
6. b) How would you rate the impacts of the Accepted for Traffic Incentive provision on the quality of the construction relative to your experience with other incentive/disincentive provisions?            
Traditional Calendar Day I/D Same.   Better Worse Worse  
A+B Calendar Day Incentive Same.   Same Same Same  
Lane Rental Same.   Same Same Same  
7. a) Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the safety of the work zone? No Impact.   No impact compared to A+B, negative impact compared to calendar day job. Negative. Positive. Traffic maintained for shorter periods in construction zones.  
7. b) How would you rate the impacts of the Accepted for Traffic Incentive provision on the safety of the work zone relative to your experience with other incentive/disincentive provisions?            
Traditional Calendar Day I/D Same.   Same Worse Better  
A+B Calendar Day Incentive Same.   Same Same Same  
Lane Rental Same.   Same Same Same  
8. a) Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the productivity and effectiveness of the contractor staff? Productivity decreased over life of the project.   Positive (Better staffing) No impact. Negative. Long hours and less time off causes grief and poor attitudes on everyone.  
8. b) How would you rate the impacts of the Accepted for Traffic Incentive provision on the productivity and effectiveness of the contractor staff relative to your experience with other incentive/disincentive provisions?            
Traditional Calendar Day I/D Worse.   Better Worse Worse  
A+B Calendar Day Incentive Same.   Same Same Same  
Lane Rental Worse. (Depends on rental criteria.)   Same Same Same  
9. a) Did the Accepted for Traffic Incentive provisions have a positive, negative or no impact on the productivity and effectiveness of the MDOT/Consultant Engineering, Inspection and Administrative staff? Productivity decreased over life of the project.   High stress from employees. No impact. Much longer hours used per day, but overall time was shorter.  
9. b) How would you rate the impacts of the Accepted for Traffic Incentive provision on the productivity and effectiveness of the MDOT/Consultant Engineering, Inspection and Administrative staff relative to your experience with other incentive/disincentive provisions?            
Traditional Calendar Day I/D Worse.   Same Worse Worse  
A+B Calendar Day Incentive Same.   Same Same Same  
Lane Rental Worse.   Better Same Same  
10. Are there any other thoughts you have on the positive or negative aspects of the Accepted for Traffic Incentive provisions? Overall experiences with the incentive projects are positive. It is a good tool to use in high traffic and high impact areas as long as the rewards are commensurate with the risks.   (None.) There are both positive and negative aspects. I do firmly believe that the quality of work becomes compromised the closer to maximum incentive date the contractor gets. Positive aspects of course are getting the road open to the public. Everyone is making money. I do believe the contractors incentive to complete the project with full bonus remains the same whether full incentive is $4 million or $2 million. It's a shame the industry as a whole has to resort to this type of language and specs to achieve what could be completed using current spec book standards. This no excuse incentive forces both sides to complete the work under less than favorable working conditions.  

Contact

Jerry Yakowenko
Office of Program Administration
202-366-1562
E-mail Jerry

 
Updated: 04/07/2011
 

FHWA
United States Department of Transportation - Federal Highway Administration