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Publication Number: FHWA-SA-96-021
Date: October 1996
An innovative bidding procedure-called A+B+C-and a "can-do" spirit led to a major rehabilitation project on Interstate 70 in Indiana being opened to traffic sooner than expected and with a 5-year warranty on the pavement's performance.
The project was the Indiana Department of Transportation's (DOT) first use of A+B+C bidding-a process formulated at a 1994 Transportation Research Board (TRB) session on innovative contracting. The "A" component consists of the costs of labor and materials. The "B" component is the cost of disruption to traffic caused by the construction-namely, the number of days that the contractor would take to complete the work and the number of peak-period lane closures and non-peak-period lane closures that would be required. The "C" component requires the contractor to provide a 5-year warranty on the work. Traditional bidding procedures take only the "A" component into account.
"The whole idea is to get the contractors off the road as quickly as possible and to build a pavement that lasts longer," says Don Lucas, chief engineer for Indiana DOT and chairman of the TRB session on innovative contracting. "It's what our customers expect from us."
The contract called for rehabilitation of a 6.9-km (4.3-mi) stretch of I-70 near Greenfield, east of Indianapolis. The highway currently has an average annual daily traffic of 35,000 vehicles, 29 percent of which are trucks. The new pavement is designed for an average annual daily traffic of 40,000 vehicles and 22 million equivalent single-axle loads over its 15-year design life.
The Indiana DOT set the cost of each peak-period lane closure at $13,800, each non-peak-period lane closure at $4,600, and each contract day at $2,000. Each bidder had to also agree to provide a 5-year warranty on the entire overlay; the costs of any necessary repairs during that period would be borne by the contractor.
The costs of materials (A) and time (B) were then summed for each bid, and the contract was awarded to the low bidder (see table). Milestone Construction Co.'s winning bid was for $9.7 million-significantly less than the two competing bids.
To encourage contractors to complete construction on schedule or sooner, the A+B+C process imposes penalties for any additional construction days beyond the original schedule and rewards contractors for shaving time off the construction schedule. The incentives worked on the I-70 project-the project was completed 55 days ahead of schedule and lane closures were reduced by more than one-third. This saved motorists between $1 million and $1.5 million in fuel, vehicle wear and tear, time, and other user costs, according to Indiana DOT.
During the 5-year warranty period, the pavement will be evaluated annually to ensure it meets Indiana DOT's specifications for longitudinal cracking, ride quality, rutting, and skid resistance. The contractor is responsible for making any needed repairs during that time.
"We set a 5-year warranty because if the pavement lasts 5 years with the parameters we set, we'll get a 15-year pavement," Lucas says.
The contract required that the asphalt binder be graded at least PG64-28 and that the aggregates meet the Superpave gradation requirements. Although the contractor was not required to use the Superpave mix design system on the project, Milestone Construction Co. chose the Superpave system over the Marshall or Hveem procedures because of the better pavement performance expected.
Lucas says that performance guarantees are the best way to encourage adoption of the Superpave system. "Contractors at the TRB session said, 'If you want us to do innovative pavements, add a warranty process.'"
Indiana DOT's A+B+C process was developed with lots of help from the industry. The DOT formed a user-producer group, including aggregate and asphalt suppliers, to hammer out a specification for the A+B+C process. This ensured that the specification was fair to all players.
Another team, consisting of representatives from the DOT and industry, ensured that the highway agency, the contractor, and all suppliers and subcontractors worked in concert to build a quality pavement on the I-70 project.
Lucas is thrilled with the results of Indiana's first A+B+C contract. "I've been here for 37 years, and I've seen a lot of asphalt pavements, but this is one of the best I've seen," he says. "It was obvious that everybody thought it was their pavement-they took ownership and were proud of the product."
Indiana DOT Commissioner Stan Smith is also a strong proponent of the process. "Projects bid on duration and quality save motorists' time, which is so precious in our lives today. By setting a price on the inconveniences and hassles of road construction and making contractors accountable for their own procedures and work, these projects save us all money, and they ensure we'll have efficient roadways with superior driving surfaces to take our State into the next decade."
Building on the success of this year's A+B+C project and of 5 A+B contracts let on other heavily traveled roads, Indiana DOT plans to award 2 A+B+C projects and 10 to 12 A+B jobs in 1997.
For more information, contact Don Lucas at 317-232-5529 (fax: 317-232-0238).
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