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Publication Number: FHWA-HRT-04-027
Date: July 2004
The successful use of an innovative contracting strategy is helping the Virginia Department of Transportation (VDOT) and Federal Highway Administration (FHWA) ensure the timely completion of Virginia's Springfield Interchange project, also known as the "Mixing Bowl."
The strategy, called a "No Excuses Incentive," involves offering the contractor a significant bonus (typically 2 to 10 percent of the contract's value) if "substantial completion" of the project is achieved by a set date. "Substantial completion" is typically defined in the contract, and the project engineer is usually authorized to make this determination. The incentive is known as "No Excuses" because the date established to receive the incentive will not be extended due to any delays that arise during construction, even though such delays are normally granted extensions under traditional contracting methods. These delays include those caused by work disruptions, utility conflicts, design changes, right-of-way issues, permitting issues, and weather conditions.
One of the first locations where this form of incentive saw use in State highway projects was in Florida during the mid 1990s. These projects covered the gamut from lane additions to resurfacing, bridge repair, intersection improvement, and highway reconstruction.
In the case of the Springfield Interchange, VDOT and FHWA opted to offer a No Excuses Incentive for Phases 2 and 3 of the 8-year project, which is aimed at redesigning a complicated and historically congested interchange in the vicinity of Springfield, Virginia, involving I-495 (the Washington Beltway), I-95, and I-395. Approximately 430,000 vehicles a day travel through the interchange. The incentive amounted to $10 million if the work was completed on or before August 18, 2001, with the amount dropping to $5 million if completed on or before November 17, 2001, with the contract fixed date for completing these project phases being June 1, 2002.
The project planners chose to use a No Excuses Incentive because they wanted to proceed with construction even though certain preparations typically made prior to construction had not been completed. When the project was advertised for bid in September 1998, 55 right-of-way parcels still needed to be procured, and much of the utility relocation work had yet to be completed. Any contractor bidding on the project would need to work around the utilities and unprocurred lots. It was determined that a No Excuses Incentive was the optimal method for encouraging the contractor to remain on schedule despite these difficulties, says Bob McCarty of FHWA's Virginia Division Office. The incentive worked: even though the contractor did not have full access to the construction site until right of entry had been obtained for the final parcel in March 1999, and many utilities had to be relocated during construction, the project phases were completed on schedule.
The contractor, Shirley Contracting Corp., received the full $10 million incentive. "There was some extra work added to the project, which delayed completion to June 2002, but as this additional work was not in the original contract, the contractor was not penalized," says McCarty. "The No Excuses incentive did help to complete the job quicker and with less total traffic disturbance."
For more information on the use of the No Excuses incentive for the Springfield Interchange Project, contact Bob McCarty at FHWA, 804-775-3349 (email: firstname.lastname@example.org), or Larry Cloyed at VDOT, 703-313-6686 (email: Larry.Cloyed@VirginiaDOT.org). For more information on the project in general, visit www.springfieldinterchange.com.
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