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Federal Highway Administration > Publications > Public Roads > Vol. 69 · No. 5 > Helping Roadway Contractors Fulfill Public Expectations

Mar/Apr 2006
Vol. 69 · No. 5

Publication Number: FHWA-HRT-2006-003

Helping Roadway Contractors Fulfill Public Expectations

by Kathleen A. Bergeron

Incentive and disincentive provisions can help motivate highway builders to complete projects economically, safely, and quickly.

Long lines such as this one and motorists' short tempers are among the costs borne by the public when roadwork drags on. How to motivate contractors to complete projects quickly is an increasingly important issue for DOTs.
(Above) Long lines such as this one and motorists' short tempers are among the costs borne by the public when roadwork drags on. How to motivate contractors to complete projects quickly is an increasingly important issue for DOTs. Photo: AAA Foundation for Traffic Safety.

A joke that made the rounds a few years back tells of a software mogul who, speaking at a computer trade show stated that if the automobile industry had kept up with technology the way that the computer industry does, everyone would be driving $25 cars that average 1,000 miles to the gallon.

The joke continues: In response, the auto industry issued a press release stating that if it had developed technology the way the software industry does, cars would have some rather odd quirks. Every time workers repainted the lines on the road, motorists would have to buy a new car. For no reason whatsoever, the car would crash twice a day. Maneuvers such as a left turn occasionally would cause the car to shut down and refuse to restart, and the motorist would have to reinstall the engine. The airbag system would ask, "Are you sure?" before deploying. And every time a new car was introduced, buyers would have to learn to drive all over again because none of the controls would operate the same as they did in the older car.

Although amusing, the story perhaps is more valuable as an object lesson than as a joke: People in the highway community might well ask themselves, "How well do I serve my customers compared to the way other industries serve theirs?"

Traffic circles, such as the one shown here under repair, and other areas where vehicles need to merge are especially susceptible to wear and tear-and to public frustration when the merging areas are tied up during maintenance projects.
Traffic circles, such as the one shown here under repair, and other areas where vehicles need to merge are especially susceptible to wear and tear-and to public frustration when the merging areas are tied up during maintenance projects.

How does the highway industry compare, for example, with utilities such as water, electricity, or natural gas, or with other public services? Better yet, how does it compare with more competitive consumer-products industries—manufacturers of laundry detergents, breakfast cereals, soft drinks, and, yes, automobiles and computers? On some level, all are trying to do the same thing—make their customers happy. Further, State departments of transportation (DOTs) also have the responsibility to provide a safe and efficient driving experience.

"One of the greatest challenges for State DOTs is motivating construction contractors to achieve or even surpass an agency's goals for customer satisfaction," says former New Jersey Department of Transportation Commissioner Jack Lettiere. When several contractors bid on a highway construction project, and the lowest bidder gets the job, how does the DOT motivate the winner to complete the project better, faster, or with less impact on the traveling public? In other words, how does a DOT encourage contractors to build highway projects in such a way that the process responds to the public's desires and needs?

Repairing or replacing bridges such as this one seems to guarantee inconvenience for motorists, but State DOTs are chipping away at that 'fact' through incentives to speed construction.
Repairing or replacing bridges such as this one seems to guarantee inconvenience for motorists, but State DOTs are chipping away at that "fact" through incentives to speed construction.

The obvious way is simply to demand it—write specifications and contract provisions that clearly define the schedule requirements. The problem with such an approach is that the DOT may not receive any bids if it makes the project requirements too stringent, or contractors may include large contingencies in their bids to offset potential loses if they do not meet the contracting agency's schedule. Moreover, if the agency specifies exactly how it wants the project done, it is not benefiting from the creativity of the marketplace. The very basis of a free-market economy is that the company or individual who can come up with a better approach gets the advantage. So if a DOT can somehow devise a way for a contractor to use its own creativity to reach a specified level of performance, the result will be a win-win for both the DOT and the private firm.

The public's desire for smooth roads has motivated DOTs to resurface rural lanes, such as those shown here, as well as urban roads.
The public's desire for smooth roads has motivated DOTs to resurface rural lanes, such as those shown here, as well as urban roads.

A Two-Way Street

Of course, the challenge is not simply persuading contractors to respond appropriately to what is required of them. It also entails knowing exactly what to demand in the first place. What, precisely, does the public want with regard to particular roads or projects? And how do DOTs gather that information?

Like other government organizations, most transportation agencies maintain an office that has the responsibility of communicating with the public. Usually the office is dubbed Public Affairs or Public Information or Public Outreach. Much of the office's work is one-way communication: telling the public the story the agency wants to deliver. The office sends press releases to the media (which, it is hoped, will convey the story to the public), distributes brochures at hearings and trade shows, and publishes newsletters geared toward specific projects that target businesses and residents who may be affected by the projects.

Although such communications help demonstrate how an agency is spending the funds entrusted to it, something may be missing. In comparison to the volume of information leaving the agency, very little feedback from highway users is brought into the organization to help determine its responses to the public's wants and needs. True communication, however, is a two-way street, providing information and listening or receiving feedback.

This deficiency is not unique to highway agencies. In a 1976 article published in Public Relations Review, authors Sue H. Bell and Eugene C. Bell discuss two approaches to public relations, one they call "functionary" and the other "functional." The functionary approach is based on the assumption that the purpose of public relations (or public affairs, or public outreach) is limited to effecting changes to the environment outside the organization. On the other hand, functional public relations assumes that changes can be made to the organization itself as a result of information gained from outside.

"Functionaries" attempt to preserve and promote a favorable image of the organization in the community based on the hypothesis that if the organization is "liked," the public will continue to absorb its outputs. In contrast, "functionals" seek outside information to see where the organization can better serve its constituents. So, instead of talking about "relating to the public," or "public relations," the reference is to two-way communication. And in private industry, being able to change a product or service (whether it is computers, automobiles, or whatever) to meet the public's changing needs can be critical to survival. This is important for public agencies too. Consider for a moment how local fire departments have changed over the last 50 years. Today they encompass emergency/medical response departments in addition to traditional fire suppression/prevention departments, as a result of the changing public need for these services.

In the Federal highway business, Section 128 of Title 23 of the United States Code requires public hearings whenever Federal funds are included in a highway project. But too often, comments are merely recorded. As stated in the forward to the report Public Involvement Techniques for Transportation Decision-making (FHWA-PD-96-031), "Acting in accord with basic democratic principles means that public involvement is more than simply following legislation and regulations. In a democratic society, people have opportunities to debate issues, frame alternative solutions, and affect final decisions in ways that respect the roles of decisionmakers. Knowledge is the basis of such participation. The public needs to know details about a plan or project to evaluate its importance or anticipated costs and benefits. Agency goals reflect community goals. Through continued interaction with the entire community, agencies build community support and, more importantly, assure that the public has the opportunity to help shape the substance of plans and projects."

Opening a Dialogue

Beyond two-way communication, where information is gained from both sides, lies the realm of true dialogue, where one side makes a point and the other responds constructively, and where there is, in effect, a conversation. One good example of dialogue in the highway community is now occurring on the topic of pavement performance.

When a 1995 FHWA survey revealed pavement smoothness to be motorists' highest priority, several State and Federal initiatives encouraged contractors to focus on that objective. Here, technicians test to see how well the contractors responded.
When a 1995 FHWA survey revealed pavement smoothness to be motorists' highest priority, several State and Federal initiatives encouraged contractors to focus on that objective. Here, technicians test to see how well the contractors responded.

In late 1995, FHWA sponsored a national survey of highway users. The survey consisted of an 18-minute telephone questionnaire with 2,205 interviews completed in the end. The responses were weighted to reflect U.S. Census Bureau norms for gender, age, race/ethnicity, education, and census region. The report that came from the interviews, the National Highway User Survey, looked at the public's overall satisfaction with various aspects of the highway system. "It is clear that the top priority for improving the Nation's highways is to focus on the quality of the roadway surface," FHWA and its consultants concluded. "This is the factor that will most significantly increase public satisfaction with the highway system."

Responding to that call for action, FHWA created a multiagency team in 1997 to develop and market a national pavement smoothness initiative. Using as models the pioneering incentive program for asphalt pavement smoothness created by the Arizona Department of Transportation (ADOT) and a similar program for portland cement concrete championed by the Kansas Department of Transportation, FHWA strongly encouraged State DOTs and their contractors to focus on building smoother pavement surfaces.

Boston's 'Big Dig' project, part of which is shown here completed, encapsulated nearly all the public's frustrations with major transportation projects- construction delays, cost overruns, traffic tieups, safety concerns- some of which were revealed in FHWA's 2005 survey. Today the project is finished and sends motorists whizzing on their way beneath the city.
Boston's "Big Dig" project, part of which is shown here completed, encapsulated nearly all the public's frustrations with major transportation projects- construction delays, cost overruns, traffic tieups, safety concerns- some of which were revealed in FHWA's 2005 survey. Today the project is finished and sends motorists whizzing on their way beneath the city.

The challenge was determining how to motivate construction contractors to perform above and beyond their normal levels. This is where the concept of incentives came into play. "Incentives are great tools because they enable a transportation agency to set a goal for contractors and, within certain limits, allow the contractor to use its ingenuity to come up with the means by which to achieve the goal," says FHWA Senior Pavement Design Engineer Mark Swanlund.

Motorists on this street might settle for any pavement at all, let alone smooth pavement, as they negotiate an especially troublesome work zone.
Motorists on this street might settle for any pavement at all, let alone smooth pavement, as they negotiate an especially troublesome work zone.

This approach is similar to the way the Federal Government works with automobile manufacturers to ensure regulatory compliance. Rather than specifying exactly how the car companies should build their products, the Government sets a number of general standards to which manufacturers must adhere. For example, Corporate Average Fuel Economy standards guide the fuel efficiency of a company's products in general, National Ambient Air Quality Standards govern the volume of air pollution that companies can emit, and the New Car Assessment Program sets standards for how well vehicles should handle front-end crashes.

According to Swanlund, encouraging State DOTs to adopt incentive specifications through the FHWA-sponsored pavement smoothness initiative was one of many factors that resulted in significantly improved pavement conditions on the national highway system. The "response" to the public's call for action was, in effect, the other half of a conversation between the motoring public and the Nation's transportation professionals.

Surveys Say . . .

But that was not the end of the conversation. In 2000 FHWA again brought the driving public into the conversation through a survey and issued a report the following year. FHWA intentionally modeled the survey on the 1995 instrument to facilitate comparison, study customer satisfaction trends, and direct future activities based on changes in the public's priorities or on improvements in public satisfaction with pavement smoothness.

A recent widening project on northwestern Arizona's S.R. 68 featured contractor incentives /disincentives, a public relations program, and other features that helped result in ontime completion with minimal driver inconvenience.
A recent widening project on northwestern Arizona's S.R. 68 featured contractor incentives /disincentives, a public relations program, and other features that helped result in ontime completion with minimal driver inconvenience.

The 2000 survey revealed that although pavement conditions still resonated as a significant concern (21 percent) among highway users, traffic flow (28 percent) and safety (26 percent) were now more important priorities.

In 2005 FHWA and its partners completed a third effort, the Traveler Opinion and Perception Survey. This latest effort tracks closely with earlier user surveys. The following "Important Characteristics of an Effective and High Quality Transportation System" were listed as priorities:

  • Highway and roadway safety
  • Ability to get where I want to go easily
  • Bridge conditions
  • Being able to get around as a pedestrian safely and easily
  • Pavement conditions

"These results clearly show that travelers place high value on their ability to get around safely and easily," says Rebecca Elmore-Yalch, president and CEO of Northwest Research Group, Inc., the firm that conducted the survey on behalf of FHWA. "These represent the most important aspects of a high-quality and effective transportation system, and travelers wish to see this as a continued focus."

By 2005, it seemed, highway users had relegated pavement conditions to the fifth position on their list of priorities. The results do not indicate whether the highway community made a significant enough impact on pavement conditions to have an impact on user perceptions or whether user priorities simply changed over the previous decade.

A Work Zone Incentive In Arizona

Several highway agencies are using innovative incentives to encourage contractors to minimize the negative impact of highway construction on their customers. In Arizona, for example, ADOT kept an eye on customer service when it developed an incentive/disincentive approach for a $42 million project in the northwestern part of the State. The project called for widening 21.7 kilometers (13.5 miles) of State Route 68 (S.R. 68) from a two-lane rural road into a four-lane divided highway.

Rather than looking at the job as simply building a highway from point A to point B, ADOT officials took the time to understand the customers who use the route. From that, ADOT determined that this section of S.R. 68 is a major commuter route for people who are employed by casinos and other entertainment venues across the State line in Laughlin, NV. But a large number of commercial truckers and vacationers travel the route as well. Thus, S.R. 68 does not have the morning and afternoon peak traffic periods typical of other parts of the country. Rather, a steady stream of traffic generally runs from early morning to late evening, meaning that construction crews could not simply schedule their work around the traditional rush hours.

ADOT realized early on that the construction project, which ultimately lasted almost 2 years, could have been a major headache for its customers, so agency officials set up what they termed a traffic management incentive specification. Under the specification, ADOT established an incentive/disincentive fund of $400,000 to encourage the design-build contractor to maintain a target travel time through the work zone during the entire construction schedule. To determine whether the target was met, the contractor was required to measure the amount of time it took travelers to go through the work zone. Further, the contractor had to select a method for collecting the raw data, calculating the average travel times through the work zone, and then reporting those averages to ADOT. The specification required that the average travel time not exceed 27 minutes. For each minute above that time, the contractor would be charged $21.50.

The contractor chose a measuring system that employed cameras, positioned at both ends of the work zone, to snap pictures of the license plates of vehicles entering and leaving the work zone. A central processor then matched photos of the same plates and determined the elapsed time between when the car entered and left the work zone. At the end of the project, only $14,857 had been deducted from the $400,000 incentive, thereby earning the contractor 96 percent of the bonus fund.

Selected Customer-Focused Activities at FHWA

Knowing what needs to be done and having the tools to do it are two separate things. So how does one move to a more customer-focused approach, both in personal approaches and organizationally? FHWA sponsors a number of programs and activities that can help State and local agencies improve their delivery of quality roadway projects. They include the following:

National Highway Institute Course. Public Involvement in the Transportation Decision-Making Process (#142036) is 3-day course that teaches attendees how to identify key decision points where the public should be involved. Among the topics covered are selecting and applying specific techniques for sharing information with the public, identifying and adapting to different cultural sensitivities, and developing public involvement plans. For more information, visit www.nhi.fhwa.dot.gov.

Accelerated Construction Technology Transfer (ACTT). ACTT is a program through which State DOTs can gain access to a team of nationally recognized leaders in an array of disciplines who conduct a workshop focused on a single highway corridor or project selected by the host agency. For more information, visit www.fhwa.dot.gov/construction/accelerated/.

Performance Specifications Strategic Roadmap. FHWA developed this report as a tool to guide the highway community in developing, implementing, and accepting performance specifications as viable tools for highway construction. To view the roadmap document, visit http://www.fhwa.dot.gov/construction/.

Transportation Curriculum Coordination Council (TCCC). The TCCC is a partnership between FHWA, State DOTs, and the highway transportation industry to support the training of the highway construction personnel. The council provides a core curriculum of materials and training available to State and local transportation agencies. For more information, visit www.nhi.fhwa.dot.gov/tccc/.

ADOT had hired a public relations firm for the project as well. The firm developed public service announcements, radio media alerts, a Web site, an informational phone number, and a newsletter, all aimed at keeping the public informed on the status of the project.

Construction of toll plazas, border crossings such as the one shown here, and similar highway-related facilities can pose special problems to State DOTs because they cannot use detours to steer traffic away. The New York State Thruway Authority reduced the resulting congestion through application of a performance disincentive.
Construction of toll plazas, border crossings such as the one shown here, and similar highway-related facilities can pose special problems to State DOTs because they cannot use detours to steer traffic away. The New York State Thruway Authority reduced the resulting congestion through application of a performance disincentive.

Critics might question whether the $400,000 incentive might have been better spent building more roadways elsewhere in the State. "Due to the lack of detour routes for S.R. 68," responds Jennifer Livingston, then-resident engineer for ADOT's Kingman District, "the traffic management incentive/disincentive clause was vital in minimizing delays to the traveling public, especially for commuters and those getting to and from medical appointments, government facilities, and other daily trips."

The case becomes clearer when individual costs are considered as well. In the 2005 Urban Mobility Report, the Texas Transportation Institute estimates that, as a national average, being stuck in a work zone costs each motorist $13.45 per hour in terms of the value of lost time. Further, each hour a commercial motor carrier sits in a congested work zone costs the firm $71.05. But in the end, ADOT received a great deal of positive feedback from the public, both for the agency's outreach related to construction and for minimizing delays in the work zone.

Concentrating manpower, as shown here, is one way to speed construction, as contractors are increasingly urged-even required-to complete work in urban and other high-traffic areas as quickly as possible.
Concentrating manpower, as shown here, is one way to speed construction, as contractors are increasingly urged-even required-to complete work in urban and other high-traffic areas as quickly as possible.

A Work Zone Disincentive In New York

When congestion delays due to work zones are potentially significant, some States require contractors to suspend construction entirely during peak traffic periods. In June 2005, experts from around the country joined the New York State Thruway Authority (NYSTA) for an intensive, 2-day workshop focused on a deck replacement project on the Tappan Zee Bridge. Sponsored by FHWA's Accelerated Construction Technology Transfer (ACTT) initiative, the workshop helped NYSTA settle on a prefabricated system that would shorten construction time and improve safety and quality.

NYSTA selected a construction method using precast concrete slabs, which offered speedy construction and minimized exposure of workers to traffic. The project involved sawing up and removing the existing pavement, putting down a bedding material, installing the slabs, grouting dowels, and then placing the bedding grout. The contractor installed about 279 square meters (3,000 square feet) of panels in each 8-hour, offpeak traffic closure.

The toll plaza services more than 125,000 vehicles per day, so any delay in opening it on time could be disastrous. NYSTA, therefore, devised a performance standard to meet the need: For every minute past 6 a.m. that the toll plaza was delayed in opening, the contractor faced a penalty of $1,300, up to a maximum penalty of $250,000 per day. The installation proved so successful that no penalties were assessed.

When Time Is Of the Essence

The ADOT and NYSTA projects used incentives, an approach that says to the construction contractor, "Here's the goal you need to reach to get some bonus money. You figure out the best way of getting there." And, as in the New York case, if the contractor fails to look for innovations, it might actually lose money on the project.

Perhaps the most widely used performance specification is one focused on how quickly a contractor can complete a project. More and more, agencies are recognizing that the bottom line construction cost of a project has to include the impact on the driving public. So the DOTs offer contractors monetary incentives for early completion with the daily incentive amount based on estimated road-user costs.

A case in point: On January 5, 2002, a gasoline tanker traveling Interstate 65 (I-65) within the I-20/I-59/I-65 interchange in Birmingham, AL, crashed and burned under a bridge. The fire caused the steel girders of the main span over southbound I-65 to sag about 3 meters (10 feet), which required closing all northbound and southbound lanes. Removal of the damaged bridge began as soon as the wreck was cleared, and northbound traffic was restored the next day. The Alabama Department of Transportation (ALDOT) estimated costs to road users caused by the southbound closure at $90,000 per day.

ALDOT designed a new concrete girder bridge and awarded the contract on January 16. Construction began January 21. The contract allowed 90 days for completion of the new bridge, with an incentive/disincentive provision of $25,000 per day. The successful bidder completed the new bridge in 37 days, earning an extra $1,325,000. The contract cost, including the incentive payment, was still less than the cost proposed by the second-place bidder.

"Within 53 days, the damaged bridge was removed, the design completed, and a new bridge built, demonstrating intense commitment and cooperation among all parties involved," says FHWA Alabama Division Administrator Joe Wilkerson, "especially State engineers, the concrete fabricator, and the contractor that built the new bridge."

On January 5, 2002, a gasoline tanker crashed and burned under a bridge along I-65 in Birmingham, AL.

After the crash, the FHWA Alabama Division and ALDOT responded immediately, designing a new bridge and awarding a construction contract within 13 days of the tanker crash. Incentives motivated the contractor to finish the job in little more than a month, and the new bridge, shown here, was opened February 27.
(Top) On January 5, 2002, a gasoline tanker crashed and burned under a bridge along I-65 in Birmingham, AL. Seen here (bottom), emergency personnel responded immediately, but the fire caused steel girders to sag dangerously and forced the closing of northbound and southbound lanes.

(Bottom) After the crash, the FHWA Alabama Division and ALDOT responded immediately, designing a new bridge and awarding a construction contract within 13 days of the tanker crash. Incentives motivated the contractor to finish the job in little more than a month, and the new bridge, shown here, was opened February 27.

New Mexico Uses Innovative Incentives

A look at a New Mexico example ties many elements of the story together. A recent project needed speedy construction, and the New Mexico Department of Transportation (NMDOT) added its own twist. Reconstruction of the I-25 and I-40 interchange in Albuquerque required construction or rehabilitation of 55 bridges and 177 kilometers (110 miles) of roadway. Lacking viable alternate routes, NMDOT had to complete the project while motorists continued to use the roadway.

The original interchange was designed in 1967 to support 40,000 vehicles per day. At the time of its reconstruction, however, it was severely overutilized, with an estimated 300,000 vehicles daily. Congestion resulted in an average 1.7 crashes per day, with an economic impact estimated at $12 million annually.

This aerial photo from October 2001 shows the Big-I in New Mexico during construction. In the lower left corner of the interchange (in the vicinity of the concrete mixing tower) is a 6.9- hectare (17-acre) parcel of land that the construction contractor earned as a bonus for completing the project ahead of schedule.
This aerial photo from October 2001 shows the Big-I in New Mexico during construction. In the lower left corner of the interchange (in the vicinity of the concrete mixing tower) is a 6.9- hectare (17-acre) parcel of land that the construction contractor earned as a bonus for completing the project ahead of schedule.

In the end, reconstruction enhanced the level of service and reduced the crash rate on the most heavily traveled interchange in the State. NMDOT estimates that the new interchange will benefit the Albuquerque economy by approximately $1 billion over the first 10 years. The public benefits from reduced travel time, enhanced safety, and environmental improvements.

To minimize disruption to the community, NMDOT decided to reconstruct the interchange under a single contract with incentives to keep construction time under 2 years. But with little funding available for monetary incentives, the agency offered the contractor innovative incentives, most notably ownership of excess right-of-way if the project was finished ahead of schedule. NMDOT purchased an 8.5-hectare (21-acre) parcel that included about 1.6 hectares (4 acres) of required right-of-way, with the remainder used as a staging area during construction. Since construction was substantially complete before the contract calendar date, the contractor received the deed to the remaining 6.9-hectare (17-acre) parcel. Ultimately, several tracts of land owned by NMDOT and deemed in excess of future highway needs were transferred to the contractor in lieu of cash incentives.

To minimize the impact on traffic, the project team used progressive techniques, such as segmental bridge construction, and established a traffic surveillance system and incident response program for the construction area. Through close contact with the media during the project, NMDOT cultivated public support by apprising motorists of potential delays. In the end, the incentives and careful management paid off: The completed interchange opened to traffic in May 2002, after only 23 months of construction.

Staying Tuned

The need to learn what the public wants has been recognized for decades. As noted in the FHWA report Moving America: New Directions, New Opportunities, published in February 1990, "An understanding of what Americans want from their transportation system is as important to the formation of transportation policy as analysis of facts and figures."

Construction-related traffic tieups, such as the one shown here near I-95 in Boca Raton, FL, continue to inconvenience motorists, but transportation planners are refining incentive clauses and other contract elements with the goal of reducing disruption levels lower than ever.
Construction-related traffic tieups, such as the one shown here near I-95 in Boca Raton, FL, continue to inconvenience motorists, but transportation planners are refining incentive clauses and other contract elements with the goal of reducing disruption levels lower than ever.

But understanding what the public wants and needs—whether smoother roads, less interference with traffic by construction, or something else—is not necessarily the same as attaining the desired level of performance from U.S. highways. Incentives and disincentives are an invaluable tool for attaining those levels of response.


Kathleen A. Bergeron is a marketing specialist with FHWA in Washington, DC. She works on Highways for LIFE, a program with the goal of dramatically enhancing the quality, safety, and speed of highway construction in the United States. Prior to joining FHWA, she managed communications and marketing programs for consulting engineering firms and transportation agencies at the State and local levels. She holds a bachelor's degree in journalism from the University of Texas at Austin and a master's degree in transportation management from San José State University. Bergeron is accredited by the Public Relations Society of America.

For more information, contact Kathleen A. Bergeron at 202-366-5508 or kathleen.bergeron@fhwa.dot.gov.

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