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Indiana Department of Transportation SEP 14 Report Alternate Pavement Type

Indiana Department of Transportation 2010 Annual Report For Alternate Bid Process on Pavement Type Selection March 11, 2011

A. Introduction

On November 18, 2009 the Federal Highway Administration approved the innovative contracting process of the Indiana Department of Transportation (INDOT) for alternate bids on pavement type for multiple projects. This process involved one bid with both Portland Cement Concrete Pavement (PCCP) and Hot Mix Asphalt (HMA) pavement in an "alternate pay items option" format that requires only one set of plans with both PCCP and HMA typical pavement sections. A Present Worth (PW) cost was calculated for future maintenance costs of both pavement types using an established Life Cycle Cost Analysis (LCCA) Strategy. This PW cost was added to the respective pay items option after the bid was opened, but the PW cost was only used to determine the low bidder. See attached Work Plan for SEP 14 dated November 2, 2009.

The primary reasons INDOT implemented this innovative contracting practice for alternate pavement type bidding are:

  1. Attract more bidders and competition.
  2. Obtain true cost savings over similar conventional bid projects.
  3. Provide a more competitive market, i.e. lower bid costs on paving items using this procedure versus the standard procedure where the pavement type is pre-determined.

INDOT let eleven (11) contracts from January 1, 2010 to December 31, 2010 with this process. Out of these eleven (11), Three (3) of them were design build and eight (8) were design bid build.

The Descriptions of the contracts are as follow:

Description of Contracts
Route Contract No. Des. No. Location County Letting Date Length
PR 69 IR-30983 0800284 0.03 mi N of SR 68 to 1.54 mi N of SR 68 Gibson 2/10/2010 1.5 miles
US 31 IR-30108 0600339 0.5 mi S of SR 26 to 1.5 mi S of SR 22/US 35 Howard 4/14/2010 3.0 miles
SR 25 IR-30840 9802920 I-65 to 0.1 mi E of CR 750 E (Seg. 1, Ph-A) Tippecanoe 5/26/2010 4.5 miles
US 31 IR-30889 0800234 0.5 mi S to 0.65 mi N of CR 200N Howard 8/4/2010 2.0 mile
US 35 9706380 Goyer Rd to CR 300 E 1.5 miles
I-70 IR-31104 0200699 0.6 mile E of Post Rd to 0.5 mile E of Mt. Comfort Rd Hancock/ Marion 9/1/2010 5.18 miles
US 24 IR-30162 0300291 0.5 mi E of I-469 to 0.5 mi E of Ryan/Bruick Rd Phase-1 Allen 10/6/2010 3.15 miles
PR 69 IR-33040 0902201 Patoka River to SR 57 (Segment 2) Pike 11/30/2010 3.52 miles
0500441 SR 57 to SR 61 (Segment 3) 4.49 miles
PR 69 IR-31121 0800285 1.97 mile N of SR 68 to 0.6 mile N of SR 168 (Section 1, Package 4) Gibson 12/8/10 3.37 miles
PR 69* IR-33047 0500443 CSX RR to North Fork of Prairie Creek (Segment 8 & 9) Daviess 4/29/2010 6.29 miles
0902174
PR 69* IR-33049 0500444 CR 1000 N to 1400 N (Segment 11) Daviess 6/9/2010 4.11 miles
PR 69* IR-33051 0902176 CR 1400N to CR 700E (Segment 12) Daviess 8/27/2010 3.73 miles
0500445 CR 700E to 0.7 mile N of US 231 (Segment 13) Daviess/ Green 6.06 miles
Total 52.40 miles

* Denote Design Build Contracts

B. Analysis

INDOT analyzed the three (3) design build contract bids using only the total bid amounts because these projects do not let as an itemized pay items format; therefore, the pavement item unit prices were not available. The estimated quantities were used to calculate PW costs for these design build contracts. And the PW costs were applied to the total bid amounts.

This report analyzed the eight (8) itemized pay items contract bids by:

  1. Comparing the total bids before and after adding the PW costs.
  2. Comparing some unit bid prices of unique pavement items against estimated costs, and
  3. Comparing some common HMA items found in both PCCP and HMA options to check for unbalanced bids.

All eight (8) contract bids were below the engineer's estimate (both PCCP and HMA pay items). On these eight (8) contracts actual bid quantities were used to calculate PW costs. Bidding these contracts using one bid package (Plans, Specifications and Contract Documents with both PCCP and HMA pavement pay items options) allowed contractors who work with both types of pavements to bid on these contracts as either/or both.

Using the Mechanistic Empirical Pavement Design Guide (MEPDG) INDOT provided both PCCP and HMA pavement design thicknesses for the mainline on these projects. INDOT then utilized the FHWA real cost software to perform LCCA with an established strategy to calculate a PW cost for both pavement types over a service life of fifty (50) years. See attached Appendix A-K for individual project Alternate Bid PW Cost Calculations. Estimated costs used to calculate the PW cost are from the data base maintained by the INDOT Office of Pavement Engineering. This data base is populated with actual historic bid costs on pavement items. In the LCCA the data from the previous five (5) years was used, this is standard procedure for INDOT. INDOT does not use a User Cost in their LCCA. Future maintenance of traffic costs was included in the calculations. See Appendix A-H for individual project bid analysis summary for itemized pay items format contracts and I-K for Design Build project bid analysis.

INDOT is confident that enough data has been collected to compare how successful this alternate bidding for pavement type selection process is. INDOT compared this process with the conventional bidding practices where the pavement type was selected ahead of the bidding. The comparison is for work type of "New Road Construction", "Added Travel lanes", "Pavement Replacement", and some major "Interchange Modification" projects. The results are as follow:

  1. Traditionally INDOT would receive four or five bids for conventional bidding. INDOT received on average 4.32 bidders per contract for nineteen (19) contracts let between January 1, 2010 and December 31, 2010. By performing the alternate bid process on pavement type selection, INDOT received more bids than expected for both itemized pay items format (an average of 6.38 bidders per contract) and design build contracts format (an average of 5.33 bidders per contract). This proves that the alternate bidding for pavement type attracted more bidders.
  2. The winning bid amounts on all eleven (11) alternate projects were substantially below the engineer's estimate. The average percentage was 26.4 below the engineer's estimate. The winning bid amounts on conventional bidding projects where the pavement type was selected ahead of the bidding were also below engineer's estimate but the average percentage was 17.4 below the engineer's estimate.
Number of and Type of Bids Winning Bid Amounts $ Engineer's Estimate $ % Below Engineer's Estimate
19 Conventional$285,295,617.09$345,413,792.3217.4
11 Alternate$422,698,033.04$574,204,558.3726.4

The above comparison shows that INDOT attracted more bidders per contract for the alternate bidding process than the conventional bidding process. INDOT also received winning bid amounts that average nine (9) percent more below the engineer's estimate for the alternate bidding process than the conventional bidding process. INDOT considered this alternate bid process to be very successful.

INDOT contacted both the Asphalt and Concrete industry representatives at the end of the year for their comments about this process. The Concrete industry provided no comments. The Asphalt industry provided the following comments and INDOT addressed these comments at a meeting with the industries held January 5, 2011:

  1. INDOT has different smoothness acceptance criteria for the HMA and PCCP pavements.

    INDOT response - As per INDOT current Standard Specification, smoothness acceptance is based on profilograph but INDOT is currently investigating for future accepting pavement smoothness utilizing IRI. The PCCP pavement tining for friction negatively influences the profilograph test method.

  2. The current pavement designs are not equivalent for shoulders for both pavements types.

    INDOT response - INDOT explained the design to both industries and they agreed that shoulder designs are equivalent for both pavement types. INDOT will entertain revised proposals based on supporting cost data.

  3. The contractors desire an option to reduce the approved pavement thickness such as by proposing a stronger subgrade.

    INDOT response - INDOT will investigate and if feasible will determine how it could be implemented into contract documents for bidding.

  4. The pavement design thickness should be replicable by designers other than the INDOT.

    INDOT response - INDOT utilizes the MEPDG and DARWin-ME 1.1. These are research grade tools that crash quite frequently. Performance is expected to improve with the release of DRAWin-2.0 in April, 2011.

  5. FHWA needs to review its directives on the usage of material price indices. Some of the material current market fluctuations could have negative effects on receiving the competitive pricing.

    INDOT response - Currently, material price indices are not included in alternate bid contracts since it would bias the comparison between the HMA and PCCP alternatives.

  6. LCCA costs should include only pavement costs that actually occur, not an ideal preventive care situation that does not or will not occur. In other words some Contractors commented that there are far too many maintenance activities such as joint seals every 3 years on HMA pavement.

    INDOT response - The pavement life strategies and subsequent life cycle costs calculated are based on typical maintenance performed by INDOT as defined in the Work Management System. These have been verified through a review of maintenance records.

  7. Contactors want the PW cost published before bid opening so they can factor in their bid amount.

    INDOT response - With the success of this alternate bidding process INDOT is not considering publishing the PW cost prior to the bid opening at this time. The PW costs continue to be published just minutes before the bid opening.

  8. LCCA and reconstruction projects should include current and future lane rental costs in the calculation.

    INDOT response - INDOT will investigate the user costs and may consider in the future.

  9. Some Contractors want to have alternate pavement options for Shoulders also.

    INDOT response - INDOT is not considering this at this time but it may consider it in the future as the program develops further.

  10. The Contractors believed that the process is open, transparent, and produces a competitive bid environmental.

C. Conclusion

The primary reasons INDOT participated in this innovative contracting practice for alternate pavement type bidding was:

  1. Attract more bidders and competition.
  2. Obtain true cost savings over similar conventional bid projects.
  3. Provide a more competitive market, i.e. lower bid costs on paving items using this procedure versus the standard procedure where the pavement type is predetermined.

The process was successful:

  1. INDOT data indicates that more bidders were attracted and the process promotes more competitive bid prices than traditional methods.
  2. Lower costs were realized than the estimates used for evaluation.
  3. INDOT also received winning bid amounts that averaged nine (9) percent more below engineer's estimate for the alternate bidding process than the conventional bidding process. This clearly indicates that INDOT saved a great deal more on the alternate pavement type bid process and it also indicates that this process is most economical.

The cost savings of the individual contracts are shown on the attached appendixes. INDOT saved the tax payers on the eleven (11) contracts approximately $15M immediately, at the bid openings, (HMA Low Bid - PCCP Low Bid). Using the Bid Analysis amounts (after PW costs applied); INDOT saved the tax payers approximately $27M over the 50 year service life of the pavements.

If INDOT compares the average difference in percentage below the engineer's estimate for all eleven (11) alternate bid contracts versus the conventional bid contracts, then the savings would be a much greater amount. INDOT received winning bid amounts that averaged nine (9) percent more below the engineer's estimate for the alternate bidding process than the conventional bidding process. Reference the table in section B Analysis above. The winning bid amounts for all eleven (11) alternate bids were $422,698,033.04 and the engineer's estimate amounts were $574,204,558.37; therefore a nine (9) % difference between alternate and conventional bid for all items, INDOT saved the tax payers approximately $51,000,000.00. This shows that INDOT not only saved on pavement pay items, but saved on all other pay items in the contracts also. INDOT believes that this greater percentage below the engineer's estimate phenomenon for Alternate Bidding versus Conventional Bidding was because INDOT does not publish the PW cost before the bids are opened. INDOT believes that this Alternate Bid process for Pavement Type Selection may affect all the bid items in the contract based on the percentage below the engineer's estimate phenomenon.

The PW cost factor for future maintenance did impact which contractor received the contract on two (2) itemized pay item contracts out of the eight (8) and one (1) design build contract out of the three (3). The comments received from the contractors are mostly positive and both industries support the process. Since, this process is more competitive and realizes cost savings, INDOT will continue to partner with the industries as questions and concerns develop.

Alternate Bidding for Pavement Type Selection 2010
APPENDIX CONTRACT # BIDDERS ID (HMA-PCCP) INITIAL BID DIFFERENCE (Δ) (HMA-PCCP) BID ANALYSIS CONSULTANT DESIGN SERVICES INITIAL BID -CONSULTANT SERVICES BID ANALYSIS -CONSULTANT SERVICES
A IR-30983 C -A $92,162.90$481,831.80$16,500.00$75,662.90$465,331.80
B IR-30108 F -A $1,595,211.70$2,327,620.70$24,300.00$1,570,911.70$2,303,320.70
C IR-30840 B -A $910,048.88$2,250,786.88$43,540.00$866,508.88$2,207,246.88
D IR-30889 E -B $2,020,912.18$3,091,798.18$69,000.00$1,951,912.18$3,022,798.18
E IR-31104 A -A $1,263,199.49$2,817,785.24$25,000.00$1,238,199.49$2,792,785.24
F IR-30162 A -A $(431,966.77)$123,826.63$8,000.00$(439,966.77)$115,826.63
G IR-33040 C -A $5,645,985.58$6,914,730.81$16,800.00$5,629,185.58$6,897,930.81
H IR-31121 A -A $(135,344.71)$737,416.66$30,000.00$(165,344.71)$707,416.66
I IR-33047 A -A $(650,000.00)$799,822.00$31,450.00$(681,450.00)$768,372.00
J IR-33049 C -A $2,966,406.52$4,035,194.52$20,550.00$2,945,856.52$4,014,644.52
K IR-33051 A -A* $2,200,000.00$3,973,284.17$48,950.00$2,151,050.00$3,924,334.17
TOTALS $ 15,476,615.77$27,554,097.59$ 334,090.00$15,142,525.77$ 27,220,007.59

Initial Bid Δ = (HMA Low Bid -PCCP Low Bid)
Bid Analysis = [(HMA+PW)-(PCCP+PW)]
* Alternate PCCP design

Contact

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

 
 
Updated: 07/27/2011
 

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