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Proposal for Innovative Contracting Practices Special Experimental Project No. 14 for CLNMAD-70
The Ohio Department of Transportation (ODOT) submits this work plan for review and approval as an innovative bidding project under the provisions of Special Experimental Project No. 14 (SEP 14). A revised pavement selection process for major rehabilitation projects in Ohio was developed recently which incorporates a matrix type of analysis that includes various cost, traffic and engineering factors. It was an attempt to produce a formal, objective, unbiased selection process. The proposed project was one of the first considered under the revised process, which has not yet been approved by FHWA and is currently being further refined as a result of a review by a neutral third party. The pavement selection scores for the two rehabilitation alternatives were exceptionally close using the matrix analysis, so ODOT would like to implement optional bidding for this project. We also expect that optional bidding on a 'large project like this will provide ODOT with substantial, current data to include in our estimating process.
The project selected for optional bidding is a 12.82 mile reconstruction of 1R 70 in Clark and Madison Counties. The existing four four facility will be rehabilitated and an additional lane will be constructed in each direction. The two alternate designs consist of rehabilitation of the existing pavement by removing the asphalt wearing surface, rubblizing the existing concrete pavement and placing a 14.75" asphalt overlay (Al) or by removing the asphalt wearing surface and placing a 1" asphalt bond breaker and a 9'kconcrete overlay (A2). The additional lanes will be full depth asphalt for Al or full depth Portland cement concrete for A2.
The proposed bid specification, ALTERNATIVE PAVEMENT SELECTION PROPOSAL NOTE (Attachment 1) is considered experimental in that it incorporates the following two elements: (A) the contractor's bid for construction and (C) a valuation of the future maintenance costs, which are different for each alternate and are based on life cycle costs. The contract will be awarded to the contractor whose responsive bid produces the lowest total sum of these quantities.
ODOT anticipates this process will allow the market and additional competition to provide our taxpayers with an opportunity for substantial cost savings. In addition, we want to determine the success of the bidding process as evidenced from understanding of the experimental bidding procedures by contractors and acceptance of the process by the industries. Inclusion of the LCCA component provides the benefit of documenting future maintenance strategies and anticipated pavement performance.
The procedure used in Ohio for LCCA is described in Attachment 2. The model represents a process that has evolved over a period of years based an pavement performance experience in Ohio and technical information from FHWA. The LCCA specific to this project is included as TABLE 1. Life Cycle Cost Analyses using the procedure in the currently approved pavement policy dated June 10, 1999 will be retained for this optional bid project.
The proposed project is a reconstruction of 8.68 miles of existing four lane IR 70 in western Madison County and 4.14 miles in eastern Clark County. The original pavement, built as three construction projects sold in 1968, consists of 2.39miles of jointed reinforced concrete and 10.43 miles of continuously reinforced concrete, It has been subsequently overlaid with several layers of asphalt concrete over the last twenty years. The 2001 traffic count was 46,790 vpd with 35% trucks. There are nine overhead structures and three interchanges within the project limits.
The design consultant is preparing plans with separate typical sections, superelevation tables, plan and profile sheets and cross sections for each alternate design. No other innovative contracting methods will be employed to reduce project duration.
The project is scheduled for the May 28,2004 letting with a contract award by June 4, 2004. A construction completion date in the spring of 2007 is expected.
A joint meeting with flexible Pavements of Ohio and the Ohio Concrete Construction Association was held on February 10, 2004 to explain the bidding procedures, contract provisions and price adjustments, as well as address other concerns and gain industry support to the extent practical. The asphalt industry expressed concerns about the precedence for selling this project based on the use of an adjustment factor "not founded on firm data." They also indicated that ODOT risks being accused of manipulating the data. Ohio responded by asserting that the maintenance schedules and costs have been thoroughly scrutinized by ODOT and both industries and that the maintenance schedules seemed reasonable to the neutral third party. The concrete industry only indicated that they didn't agree totally with the process but that it seemed fair. They were assured that the amount of the adjustment factor will be specified in the bid documents.
The Office of Estimating will develop estimates for the cost of both alternate designs. After letting the Office of Estimating will compare each bid to the appropriate estimated alternate design, and review all bids to determine whether there were irregularities associated with this bidding process. There will be no adjustments made to the method of payment for either asphalt or concrete. Concrete pavements are paid by the square yard with cores taken to determine the thickness. Asphalt pavements are paid by the cubic yard and the contractor is required to place the material at the proper rate to achieve the specified thickness.
A report will be developed and submitted to FHWA which documents project information, Life Cycle cost procedures, letting procedures, bid results from contractors, cost comparisons and a summary of any contractor comments and concerns. The report will also note any problems with the experimental bid process and address ODOT's future use of it. It is expected that the report will be prepared in July 2004.
Bidders may submit bids using one of the two pavement options under consideration for this project. Each bidder must choose its preferred pavement option and submit only one bid. The submission of more than one bid proposal for the same work from an individual firm or corporation under the same name or from an affiliated company will result in the rejection of the bids from those bidders.
A dollar value will be added to each rubblize and roll asphalt overlay bid. The basis for the added dollar value is the Department's estimated cost difference for the future rehabilitation needs of the two pavement options over the 35-year anticipated performance for each pavement option (Life Cycle Cost Adjustment Factor). The life cycle cost adjustment factor is based on the following factors:
The bidders are advised that the Department shall not accept for review or consideration and shall not approve any Value Engineering Change Proposals for this project.
In the event that the lowest competent and responsible bid is for the rubblized and roll asphalt overlay option, a life cycle cost adjustment factor of $X will be added to the bid to determine the lowest responsible bidder. This method will only be used to determine the lowest responsible bidder. It will not be used to determine the award amount nor final payment to the contractor, The lowest bidder's total will determine the lowest bid for award consideration.
ODOT LCCA Procedures as apply to the proposed Cast Plus Life-Cycle Cost Bidding Procedure
Life-Cycle Cost Analysis (LCCA) is a process for evaluating the total economic cost of a pavement by analyzing initial costs and discounted future maintenance costs over a pre-determined analysis period. For this project, the initial construction costs will be determined from the contractor's bid. The following LCCA procedure will be used to determine the discounted future maintenance costs for each pavement alternative.
The LCCA analysis period is 35 years. Because the analysis period exceeds the structural design life, future maintenance and rehabilitation actions must be predicted and included in the analysis to keep the pavement in serviceable condition for the 35-year period. The future maintenance schedules have been developed based on historical perFormance while factoring in improvements made over the years.. ODOT does not use salvage value. Thus the maintenance schedules have been balanced such that all alternatives are in approximately the same condition in year 35. The future maintenance schedule for interstate and other heavy traffic routes is as follows:
To account for the time-value of money, all future maintenance work is discounted using the real discount rate for 30-year or greater programs published in the current revision of Circular A-94, Appendix C from the federal Office of Management and
Budget. The discounted future maintenance costs are then added to the initial construction costs and the net present value of the alternatives are compared.
The formula for applying the discount rate is as follows:
(P/F,i%,n) = discount factor
* Prices to be determined shortly before project advertised for bid.