Building Momentum for Change: Creating a Strategic Forum for Innovation in Highway Infrastructure: Creating a Strategic Forum for Innovation in Highway Infrastructure -- Special Report 249 (1996)

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SPECIAL REPORT 249 E LUIILDNG IV\AOM EN LIM 1tLJ1 CREATING A STRATEGIC FORUM FOR INNOVATION IN HIGHWAY INFRASTRUCTURE 1r1flsportitOr) Research Board N.rir,a Rcsart h CounrI

/ TRANSPORTATION RESEARCH BOARD 1996 EXECUTIVE COMMITTEE Chairman: James W. van Loben Sels, Director, California Department of Transportation, Sacramento Vice Chairman: David N. Wormley, Dean of Engineering, Pennsylvania State University, University Park Executive Director: Robert E. Skinner, Jr., Transportation Research Board Edward H. Arnold, President and CEO, Arnold Industries, Lebanon, Pennsylvania Sharon D. Banks, General Manager, AC Transit, Oakland, California Brian J. L. Berry, Lloyd Viel Berkner Regental Professor, Bruton Center for Development Studies, The University of Texas at Dallas Lillian C. Borrone, Director, Port Commerce Department, The Port Authority of New York and New Jersey, New York City (Past Chairman, 1995) Dwight M. Bower, Director, Idaho Transportation Department, Boise John E. Breen, The Nasser I. Al-Rashid Chair in Civil Engineering, Department of Civil Engineering, The University of Texas at Austin David Burwell,President, Rails-to-Trails Conservancy, Washington, D.C. E. Dean Carison, Secretary, Kansas Department of Transportation, Topeka Ray W. dough (Nishkian Professor of Structural Engineering, Emeritus, University of California, Berkeley), Structures Consultant, Sunriver, Oregon James C. DeLong, Manager of Aviation, Denver International Airport, Colorado James N. Denn, Commissioner, Minnesota Department of Transportation, St. Paul Dennis J. Fitzgerald, Executive Director, Capital District Transportation Authority, Albany, New York David R. Goode, Chairman, President, and CEO, Norfolk Southern Corporation, Norfolk, Virginia Delon.Hampton, Chairman and CEO, Delon Hampton &Associates, Chartered, Washington," D.C. - Lester A. Hoel, Hamilton-Piofessor, Department of Civil Engineering, University of Virginia, Charlottesville. James L. Lammie, Director, Parsons Brinckerhoff, Inc., New York City Robert E. Martinez, Secretary of Transportation, Commonwealth of Virginia, Richmond Craig E. Philip, President, Ingram Barge Company, Nashville, Tennessee Wayne Shackelford, Commissioner, Georgia Department of Transportation, Atlanta Leslie Sterman, Executive Director, East-West Gateway Coordinating Council, St. Louis, Missouri Joseph M. Sussman, JR East Professor and Professor of Civil and Environmental Engineering, Massachusetts Institute of Technology, Cambridge (Past Chairman, 1994) Martin Wachs, Director, University of California Transportation Center, and Professor of Civil Engineering and City and Regional Planning, University of California, Berkeley Mike Acott, President, National Asphalt Pavement Association, Lanham, Maryland (ex officio) Roy A. Allen, Vice President, Research and Test Department, Association of American Railroads, Washington, D.C. (ex officio) Andrew H. Card, Jr., President and CEO, American Automobile Manufacturers Association, Washington, D.C. (ex officio) Thomas J. Donohue, President and CEO, American TruckiOg Associations, Inc., Alexandria, Virginia (ex officio) Francis B. Francois, Executive Director, American Association of State Highway and Transportation Officials, Washington, D.C. (ex officio) David Gardiner, Assistant Administrator, Office of Policy, Planning and Evaluation, Environmental Protection Agency, Washington, D.C. (ex officio) Jack R. Gilstrap, Executive VicePresident, American Public Transit Association, Washington, D.C. (ex officio) Albert J. Herberger (Vice Adm., U.S. Navy, retired), Administrator, Maritime Administration, U.S. Department of Transportation (ex officio) David R. Hinson, Administrator, Federal Aviation Administration, U.S. Department of Transportation (ex officio) T. R. Lakshmanan, Director, Bureau of Transportation Statistics, U.S. Department of Transportation (ex officio) Gordon J. Linton, Administrator, Federal Transit Administration, U.S:Department of Transportation (ex officio) Ricardo Martinez, Administrator, National Highway Traffic Safety Administration, U.S. Department of Transportation (ex officio) Jolene M. Molitoris, Administrator, Federal Railroad Administration, U.S. Department of Transportation (ex officio) Dharmendra K. Sharma, Administrator, Research 'hd Special Programs Administration, U.S. Department of Transportation (ex officio) Rodney E. Slater, Administrator, Federal Highway Administration, U.S. Department of Transportation (ex officio) Pat M. Stevens IV (Maj. Gen., U.S. Army), Acting Chief of Engineers and Commander, U.S. Army Corps of Engineers, Washington, D.C. (ex officio)

SPECIAL REPORT 249 BUILDING MOMENTUM FOR CHANCE CREATING A STRATEGIC FORUM FOR INNOVATION IN HIGHWAY INFRASTRUCTURE COMMITTEE FOR THE STUDY OF APPROACHES FOR INCREASING PR I VA TE -SE C TOR IN VOL VEMENT IN THE HIGHWAY INNOVATION PROCESS Transportation Research Board National Research Council National Academy Press Washington, D. C. 1996

TRANSPORTATION RESEARCH BOARD SPECIAL REPORT 249 Subscriber Categories IA planning and administration 11A highway and facility design 11113 materials and construction Transportation Research Board publications are available by ordering directly from TRB. They may also be obtained on a regular basis through organizational or individ- ual affiliation with TRB; affiliates or library subscribers are eligible for substantial dis- counts. For further information, write to the Transportation Research Board, National Research Council, 2101 Constitution Avenue, N.W., Washington, D.C. 20418. Copyright 1996 by the National Academy of Sciences. All rights reserved. Printed in the United States of America NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competencies and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to the procedures approved by a Report Review Committee consisting of the members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The study was sponsored by the Federal Highway Administration, American Association of State Highway and Transportation Officials, American Concrete Pavement Association, Asphalt Institute, National Aggregates Association, National Asphalt Pavement Association, National Lime Association, National Stone Association, Portland Cement Association, and 3M Corporation. LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Building momentum for change : creating a strategic forum for innovation in highway infrastructure /Committee for the Study ofApproaches for Increasing Private-Sector Involvement in the Highway Innovation Process, Transportation Research Board, National Research Council. p. cm.—(Special report; 249) ISBN 0-309-05907-0 1. Roads—United States—Design and construction—Technological innovations. 2. Diffusion of innovations—United States. 3. Highway research—United States. I. Series: Special report (National Research Council (U.S.). Transportation Research Board); 249. TE23.B85 1996 625.7'0973—dc2O 96-9520 CIP Cover design: Frieda A. Probst

COMMITTEE FOR THE STUDY OF APPROACHES FOR INCREASING PRIVATE-SECTOR INVOLVEMENT IN THE HIGHWAY INNOVATION PROCESS LOWELL B. JACKSON, Chairman, Northport, Michigan GARY R. ALLEN, Virginia Department of Transportation, Charlottesville LAWRENCE F. Acns, Intergraph Corporation, Reston, Virginia CRAIG A. BALLINGER, Craig Ballinger & Associates, Vienna, Virginia JOHN M. BARSOM, U.S. Steel Corporation, Pittsburgh, Pennsylvania JON A. Epps, University of Nevada-Reno EUGENE J. FASIJLLO, The Port Authority of New York and New Jersey, New York City (retired) H. JONATHAN FRANK, Morgun Venture, Ltd., Incline Village, Nevada DONALD R. GALLAGHER, Gallagher Asphalt Corporation, Thornton, Illinois GARY L. GODBERSEN, GOMACO Corporation, Ida Grove, Iowa ELIZABETH L. HOIvIER, Maryland State Highway Administration, Baltimore CHARLES R. MAREK, Vulcan Materials Company, Birmingham, Alabama PETER J. NICHOLSON, PJ Nicholson Consulting, McMurray, Pennsylvania CHARLES P. O'LEARY, JR., New Hampshire Department of Transportation, Concord ERNEST K. Orr, Environmental Systems Research Institute, Inc., Redlands, California CHARLES F. Porrs, APAC Inc., Atlanta, Georgia THOMAS F. REYNOLDS, Amoco Oil Company, Whiting, Indiana RICHARD L. TUCKER, The University of Texas, Austin LIAISON REPRESENTATIVES MICHAEL BuRE, Federal Highway Administration, U.S. Department of Transportation LOCKWOOD CARLSON, 3M Corporation, St. Paul, Minnesota JOHN CHISHOLM, American Road and Transport Builders Association, Washington, D.C. RICHARD A. CUNARD, Engineer of Traffic and Operations, Transportation Research Board DALE DECKER, National Asphalt Pavement Association, Lanham, Maryland TED FERRAGUT, American Concrete Pavement Association, Washington, D.0 CRAWFORD JENCKS, Manager, National Cooperative Highway Research Program, Transportation Research Board BERNIE MCCARTHY, Asphalt Institute, Bethesda, Maryland RICHARD MEININGER, National Aggregates Association, Silver Spring, Maryland THOMAS POTFER, National Lime Association, Arlington, Virginia CHARLES PRY0R, JR., National Stone Association, Washington, D.C. JOHN SULLIVAN, American Portland Cement Alliance, Washington, D.C. TRANSPORTATION RESEARCH BOARD STAFF THOMAS R. MENZIES, JR., Study Director CONSULTANT L. GARY BYRD, Alexandria, Virginia

PREFACE Te provision of highway infrastructure in the United States is a joint public- and private-sector enterprise. As owners and operators of the highway system, hundreds of state and local highway agencies and toll authorities are the primary customers of thousands of private firms that supply materials, products, and services for the design, con- struction, operation, and maintenance of the system. In general, this public-private market relationship has worked well, producing the most extensive highway system in the world. A short- coming of this relationship, however, is the limited incentives and opportunities for private industry to develop new products and ser- vices. The long-standing public-sector practices of purchasing high- way goods and services on the basis of initial price (first cost) rather than life-cycle cost, specifying procurements in a highly detailed and prescriptive manner, and evaluating and accepting new highway products in a different manner across hundreds of jurisdictions con- tribute to a highway marketplace often perceived as unreceptive to innovation. Although thorough and cautious evaluation and testing are essential before acceptance of new products and practices, many of these practices and other institutional impediments to innovation in the highway field do not function as safeguards of quality and long-term performance. This study follows a series of related Transportation Research Board (TRB) activities aimed at enhancing the environment for innovation in the highway field. More than 10 years ago, the TRB Committee for the Strategic Transportation Research Study (STRS) sought to accelerate innovation in the highway field by recommending a research and tech- nology program focused on a few high-priority areas in which new approaches were chronically lacking. STRS led to the congressionally funded Strategic Highway Research Program (SHRP), a source of V

vi BUILDING MOMENTUM FOR CHANGE numerous innovations that promise to enhance pavement designs and materials, bridge durability, and highway winter maintenance opera- tions. Since completion of SHRP, some of the same impediments to innovation routinely encountered by private industry have hindered implementation of SHRP products and methods despite an aggressive and publicly funded deployment campaign. Concerned about these implementation obstacles and recognizing the general need for a highway marketplace more open to new ideas and methods, TRB in 1990 formed a special task force of top execu- tives, researchers, and technologists from the public and private sec- tors to explore means by which the highway community could coop- erate to expand opportunities and incentives for such innovation. Under the leadership of John Gray, past President of the National Asphalt Pavement Association, the Task Force on Highway Research in Industry generated several ideas and proposals (see Appendix A). Included among them was the concept of a private-industry council or forum that would regularly advise and assist the public sector in iden- tifying promising measures to enhance highway research and promote innovation. The prospect of such an activity was of immediate interest to the American Association of State Highway and Transportation Officials (AASHTO) and the Federal Highway Administration (FHWA), which have long sought a common industry voice to regularly identify and be responsive to broad policy and process issues affecting highway research and innovation. To demonstrate the public sectors interest, AASHTO and FHWA agreed to provide financial support for an eval- uation of the idea, provided that the private sector also supported the study as an indication of a shared commitment to finding ways to strengthen the innovation process. TRB was asked to undertake the study and subsequently received support from the American Concrete Pavement Association (ACPA), Asphalt Institute, National Aggregates Association, National Asphalt Pavement Association (NAPA), National Lime Association, National Stone Association, Portland, Cement Association, and the 3M Corporation. To carry out the study, TRB assembled a committee of experts in highway management, design, construction, operations, and product development and marketing. During the course of its three meetings, the committee considered a number of specific measures aimed at strengthening public- and private-sector research and technology. The committee chose to focus its attention on finding ways to change the

PREFACE Vii highway marketplace so that it would naturally encourage and enable innovation, recognizing that even a modest increase in overall incen- tives and opportunities for innovation are likely to yield tremendous benefits. The recommendations in this report are aimed at building support and momentum for such change. ACKNOWLEDGMENTS The committee benefited from the perspectives and expertise of a number of individuals serving as public- or private-sector liaisons. Representing FHWA was Michael Burk, Chief of the Safety and Design Application Branch of the Office of Technology Application. Private- industry liaisons who provided valuable input throughout the study were Lockwood Carlson, Senior Scientist at the 3M Corporation; John Chisholm, Managing Director of the Materials and Services Division of the American Road and Transport Builders Association; Dale Decker, Vice President for Research and Technology at NAPA; Ted Ferragut, Vice President of Government Affairs at ACPA; Bernie McCarthy, Vice President of Industry Affairs at the Asphalt Institute; Richard Meininger, Vice President of Research at the National Aggregates Association; Thomas Potter, Executive Director of the National Lime Association; Charles Pryor, Jr., Vice President for Engineering at the National Stone Association; and John Sullivan, Director of Public Works for the American Portland Cement Alliance. Special appreciation is expressed to John Gray, whose efforts were critical to building support for the study. Others who participated in meetings and briefed the study committee include Harvey Bernstein and Peter Kissinger of the Civil Engineering Research Foundation, Joseph Schilling and James Johnson of the Electric Power Research Institute, and Robert Jortberg of the Construction Industry Institute. Anthony Downs, Senior Fellow of the Brookings Institution, presented to the committee his theories on why impediments to innovation are common to many public agencies at all levels of government. L. Gary Byrd served as a consultant, providing a link between this study and many previous activities to enhance innovation in the high- way field. Thomas R. Menzies managed the study and with the assis- tance of Gary Byrd drafted the final report under the guidance and oversight of the committee. The final report was edited and prepared for publication under the supervision of Nancy A. Ackerman, TRB

viii BUILDING MOMENTUM FOR CHANGE Director of Reports and Editorial Services. Naomi Kassabian was the editor for the report. Marguerite Sclmeider provided administrative support for the project, which was conducted under the overall super- vision of Stephen R. Godwin, Director of Studies and Information Services.

CONTENTS EXECUTIVE SUMMARY . NEW CHALLENGES REQUIRING INNOVATION ..................................6 Vital National Asset 6 Public Ownership and Operation by Thousands of Agencies 7 Emerging Challenges 8 2 CREATING A MARKET FOR INNOVATION ...............................................II Benefits of Innovation I I Impediments to Innovation 14 Overcoming Innovation Impediments 15 Summary 16 3 ACCELERATING CHANGE: STRATEGIC FORUM FOR INNOVATION IN HIGHWAY INFRASTRUCTURE .................................... 19 Mission of the Forum 19 Membership and Participation 20 Organization and Support 21 Related Initiatives 23 Summary 24 4 LAUNCHING THE FORUM .......................................................................... 25 Steps To Launch the Forum 25 Issues and Opportunities for the Forum 26 Summary 31 APPENDIX A KEY FINDINGS AND RECOMMENDATIONS FROM PREVIOUS. STUDIES ................................................................................... 33 APPENDIX B LETTER FROM VICE PRESIDENT OF THE UNITED STATES TO ADMINISTRATOR OF FEDERAL AVIATION ADMINISTRATION ENCOURAGING INNOVATION REFORMS ....................................................................................................... 38 STUDY COMMITTEE BIOGRAPHICAL INFORMATION ...................................39

EXECUTIVE SUMMARY Te provision of highway infrastructure in the United States is a joint public- and private-sector enterprise. The nearly 6.5 million km (4 million miles) of freeways, urban arterials, rural routes, and resi- dential streets that cross the country are owned and operated by hun- dreds of state and local agencies and toll authorities that purchase highway products and services from thousands of construction con- tractors, equipment makers, suppliers of materials and system compo- nents, and numerous other private businesses. Working together dur- ing the past 75 years, this large and diverse collection of public and private interests has produced the most extensive, safest, and most heavily traveled highway network in the world. NEW CHALLENGES REQUIRING INNOVATION After many years of gradually expanding and upgrading the vast highway network, the highway community has been given a new mis- sion: to restore the mature street and highway system to good physi- cal condition and make it perform more reliably, safely, and efficiently at minimum cost and with maximum benefit to taxpayers, the envi- ronment, and the traveling public. This mission is especially chal- lenging because it must be achieved under heavy and escalating traf- fic conditions, on facilities that are aging and often in need of major repair and modernization, and under tightening budgetary con- straints. In confronting these new challenges, many highway agencies are recognizing the need for greater flexibility in the way they develop and manage projects. Such flexibility is especially critical to ensuring the inflow of new products and processes for the increasingly complex and growing number of highway reconstruction and rehabilitation

BUILDING MOMENTUM FOR CHANGE projects. These projects will require innovative design and construc- lion concepts to avoid the recurrence of past mistakes that produced defective structures and premature failures. Success in meeting these challenges is critical. The highway sys- tem represents a major national investment and resource. During the past decade alone, nearly $750 billion has been invested in a highway transportation system that has become increasingly vital to personal mobility, and the movement of people, goods, and services. Perhaps no other public asset is as central to the daily lives of Americans, the national economy, and the international competi- tiveness of U.S. business. Given the profound and far-reaching importance of the highway system, even incremental advancements in highway products and services that improve system performance and efficiency can confer enormous benefits to highway users and the general public. CREATING A MARKET FOR INNOVATION Accepting the need to do more with less, many highway agencies are seeking to tap deeper into the vast potential of private industry to provide the innovative products and services necessary to meet the growing and changing demands being placed on the highway system. As principal owner and operator of the highway system, the pub- lic sector controls the procurement systems that shape the highway marketplace. Acknowledging this role, a growing number of high- way agencies recognize the need for fundamental changes to long- standing practices such as the use of highly prescriptive procurement specifications that define the materials and construction processes furnished by private industry. Of concern is how to reshape these tra- ditional procurement systems to make them more conducive, rather than restrictive, to innovation while strengthening procedures that ensure product quality and performance. Because the highway community involves thousands of public agencies and private companies, it provides a vast testing ground for a wide range of marketplace reforms aimed at stimulating innova- tion. A major disadvantage of this industry decentralization, howev- er, is that promising reforms can take many years to be widely recog- nized and accepted in general practice.

EXECUTIVE SUMMARY 3 ACCELERATING CHANGE: STRATEGIC FORUM FOR INNOVATION IN HIGHWAY INFRASTRUCTURE To accelerate the pace of innovation in highway technology, the com- mittee urges formation of the Strategic Forum for Innovation in Highway Infrastructure, whose central mission would be to identify and effect positive hange in the fundamental opportunities and incentives for innovation in products and services for the highway system. By eliciting the active involvement of visionary leaders in the high- way community, drawn primarily from the ranks of top highway designers, suppliers, and builders as well as highway owners, tech- nologists, researchers, and users, the Forum should provide a strong and continuing voice for changes in policies, practices, regulations, and other institutional factors that influence the market for innovation in highway technology. Headway in overcoming institutional impediments will require the determined and enduring commitment of those in both the private and public sectors. A number of public and private initiatives in recent years have increased industry cooperation and support for market- place reforms that foster innovation (see Appendix A). However, no activity of national stature and continuity has challenged the institu- tional status quo, developed and promoted ideas and strategies for encouraging innovation, and worked to implement and gain accep- tance of these ideas and strategies. The Forum should assume such a constructive role, offering a common setting for the varied and dis- persed segments of the highway industry to voice ideas for and to build interest in expanding incentives and opportunities for innovation. Forum activities in support of this mission may include a variety of activities, such as meetings, briefings, and panels, and products, such as studies and reports on key innovation issues (Figure ES-i). It is essential that Forum meetings and supporting activities be scheduled on a frequent and regular basis and structured to engage the interest of the highway community and key decision makers. Because the general public will achieve substantial benefits from innovation in highway products and services, public funding to sup- port the initial efforts of the Forum is warranted. Some private-sector financial assistance is also necessary to reduce Forum costs and ensure industry interest in and commitment to the Forum. To minimize start- up costs and broaden industry participation, the Forum should be, at

4 BUILDING MOMENTUM FOR CHANGE least initially, under the auspices of an existing independent organiza- tion that will provide a neutral setting for the public and private sec- - tors of the highway community. LAUNCHING THE FORUM Early establishment of an institutional home for the Forum and initia- tion of activities are strongly urged. This may be accomplished promptly through the following steps: Designation by FHWA and AASHTO of a joint task group to refine the Forum concept and to agree on specific funding and organization- al arrangements for launching the Forum, including selection of a par- ent organization. Appointment of initial membership and leadership of the Forum by the designated parent organization with significant and varied input from the private and public sectors of the highway community. Assembly of the initial Forum membership to select key innova-. tion issues for early emphasis and to plan initial activities and poten- tial products. Soon after its inception, the Forum should focus on a well-defined set of issues on which their prominent and continuing attention can effect positive change in the highway marketplace. In the commit- tees view, the most significant long-term challenge facing the high- way community is to reshape the procurement process for highway goods and services to make it more open and less burdensome to innovators, increasing the likelihood that new products and services will be offered. Achieving this outcome will require frank debate about the efficacy of such long-standing industry practices as prescriptive specifications, separation of highway design and con- struction activities, absence of meaningful warranty programs for highway products and services, and emphasis on low initial cost as the prime criterion for judging bids and awarding construction and procurement contracts. The Forum should be well positioned and well suited to spurring industry progress in overcoming these impediments to innovation.

EXECUTIVE SUMMARY LINKS WITH OTHER INITIATIVES Many of the same barriers to innovation that are present in the high- way program are found in other public-sector programs. In April 1996, Vice President Albert Gore and Secretary of Transportation Federico Peña announced a plan to restructure the procurement prac- tices of the Federal Aviation Administration (FAA) to remedy long- standing institutional impediments to the procurement and deploy- ment of critical technologies developed by the private sector. In announcing the plan, the Vice President emphasized the importance of initiating similar reforms in other public agencies (see Appendix B). In the spirit of the Vice President's endorsement of change, the Strategic Forum for Innovation in Highway Infrastructure could play a valuable role in identifying institutional reforms being implemented successfully by FAA and other public agencies to foster innovation, some of which may be well suited to emulation or experimentation by the highway field. I PARENT ORGANIZATION I STRATEGIC FORUM From the Private Sector From the Public Sector Business Executives From Officials and Executives From Contractors Federal, state, and Manufacturers local government Suppliers Toll authorities Entrepreneurs Highway users __ I _ SUPPORT GROUPS I OUTREACH GROUPS Consultants I Traditional businesses Researchers I I Emerging and potential highway Panels I I businesses Task Forces I National, state, and local Committees ) governments Academics, researchers Entrepreneurs PRODUCTS ACTIVITIES Data and fact sheets Briefings, Hearings, Reports on best practices Meetings, Panels, Reviews Proposed legislation Proposed regulatory reforms Action plans Information resources (e.g., newsletters, videos) FIGURE ES-i Membership, activities, and products of Strategic Forum for Innovation in Highway Infrastructure.

NEW CHALLENGES REQUIRING INNOVATION Te highway system in the United States is expansive and intricate, consisting of nearly 6.5 million km (4 million miles) of roads and streets, tunnels, bridges, and other structures that are owned, financed, and administered by various federal, state, county, and municipal agencies and toll authorities. These agencies procure the services of thousands of private firms that furnish products, services, and equip- ment necessary to build, maintain, and operate the system. This large and diverse highway community is responsible for sus- taining an extensive network of infrastructure that is one of the nations most valuable assets. Carrying out this responsibility, howev- er, is becoming increasingly challenging as more older and heavily traveled highways need frequent repair, maintenance, and reconstruc- tion. To meet this challenge, many highway agencies are recognizing the advantages of tapping the vast private sector to provide innova- tive products, materials, and procedures. VITAL NATIONAL ASSET Seventy-five years ago, following passage of the first Federal-Aid Highway Act, the nation embarked on a long-term initiative to link and pave the muddy roads and disconnected trails that were miring motorists across the country. Three decades later, this initiative culmi- nated in the Interstate Highway Program, which produced the safest and most modern road network in the world. The highway system has become a critical national resource. Through taxes and fees collected mainly from highway users, public agencies spend approximately $90 billion each year building, main- taming, and operating the highway system (FHWA 1995, 38-39).

NEW CHALLENGES REQUIRING INNOVATION 7 During the decade of the 1990s alone, nearly $1 trillion will have been invested in the highway system by federal, state, and local governments. The tens of billions of public dollars spent each year on highway infrastructure is dwarfed by the hundreds of billions of dollars spent by users of the system and by the many benefits derived from this use. Ninety percent of all personal travel in the United States is by auto- mobile or bus (Highway Statistics 1995, 2). Americans spend an aver- age of more than one hour a day on the road for travel to and from work, personal and family errands, and recreation and shopping (Highway Statistics 1995, 31). Expenditures on automobile and truck- ing goods and services account for about one-sixth of the gross domestic product and over-the-road shipments by truck represent more than three-fourths of the nations freight bill (AAMA 1994, 61). The highway system has become a ubiquitous part of the national landscape, central to the daily lives of Americans, the performance of the national economy, and the international competitiveness of U.S. business. Even incremental gains in innovation that make highway transportation more efficient, safe, and reliable can confer tremendous benefits to society. PUBLIC OWNERSHIP AND OPERATION BY THOUSANDS OF AGENCIES Though interconnected into a single network, individual segments of the highway system are owned and operated by numerous state and local highway agencies, public works departments, and toll authori- ties. Although some private toll roads have been built in recent years, they account for a small percentage of the total mileage. The federal government—acting primarily through the Federal Highway Administration (FHWA)—provides about one-fifth of the funding for the system using revenues collected from federal fuel taxes and excise fees. Federal agencies, however, administer less than 5 per- cent of the total system mileage (FHWA 1995, 16). Fifty states and the District of Columbia own and operate most of the major routes on the network, including the 72 000-km (45,000-mile) Interstate system. Although the Interstates and other arterials carry the bulk of the traf- fic (about two-thirds of the vehicle kilometers of travel), they contain only 10 percent of the total lane mileage. Most roads, including virtu- ally all secondary routes and residential streets, are owned and oper-

8 BUILDING MOMENTUM FOR CHANGE ated locally by about 30,000 county and municipal governments (TRB 1995, 27). Spread throughout the country and managed and organized in a multitude of ways, public highway agencies bring an assortment of political, regulatory, and administrative characteristics to the highway marketplace. Among the 50 state highway agencies alone, institution- al arrangements can vary markedly. Large states like California and Texas maintain highway networks, budgets, and staffs that are 10 times larger than those of the smaller states (Highway Statistics 1993). Likewise, county and municipal highway agencies in large metropoli- tan areas have little in common with the modest public works pro- grams of rural counties and towns. This diversity of highway ownership and administration compli- cates efforts to identify all of the institutional factors affecting innova- tion in the vast highway marketplace. As discussed in more detail later, however, there are some fairly universal characteristics of the highway marketplace that have an important effect on opportunities and incentives for innovation. EMERGING CHALLENGES Forty years after initiation of the Interstate Highway Program, with a well-developed highway network in place, the nation's highway com- munity faces many new challenges and expectations. Roads in many areas of the country have long since surpassed their original traffic projections and are accommodating vehicles of sizes and configura- tions unanticipated at the time the roads were designed and built. Traffic volumes on critical thoroughfares such as Boston's Central Artery and Chicago's Dan Ryan Expressway are more than twice what these roads were designed to carry and consist of many vehicles heav- ier than the design vehicles. Distance traveled by large combination trucks has more than tripled since 1965, and average loaded truck weights have risen by about 4500 kg (10,000 lb) (Highway Statistics 1965, 1994; TRB 1986, 34). During the past 20 years, more than 240 000 km (150,000 miles) of once-rural highway has been reclassified as urban because travel on the system has soared (Highway Statistics 1974-1994). Whereas the size of the highway system has grown comparatively little during this period, motor vehicle travel has increased by more than 70 percent and

NEW CHALLENGES REQUIRING INNOVATION is expected to continue to grow at an annual rate of 1 to 3 percent for the foreseeable future (Figure 1-1) (Highway Statistics 1994, Table VM- 1; DOT 1995, 283-284). The traditional solution of building more roads to accommodate growth in travel is viewed as an insufficient and impractical option in many instances in which land is scarce and environmental constraints and construction costs are prohibitive. Most highway agencies have shifted their focus toward renewing and preserving the system already in place. This new emphasis, however, presents many challenges. Ten percent of paved roads and 20 percent of bridges on the Federal-aid system are rated as poor or deficient (DOT 1995, 120-135). Restoration of these facilities must increasingly be accomplished under heavy traf- fic conditions that demand creative project design, construction, and traffic management concepts. Meanwhile, resources available for these activities are shrinking relative to the growth that has occurred in highway travel. Per kilometer traveled on the system, total expendi- tures on highway infrastructure have fallen by 40 percent since 1970, and capital outlays have dropped even more precipitously (Figure 1-2) (FHWA 1995, 7). Improvements in vehicle fuel efficiency during the past 20 years have contributed to faster growth in distance traveled relative to fuel tax revenue. The long-term phenomenon of escalating highway travel relative to resources available for infrastructure investment has led to a growing backlog of highway repair, maintenance, and reconstruction needs. FHWA estimates, for instance, that during the next 20 years nearly $200 billion will be required for bridges alone to significantly improve their condition (DOT 1995, 181-184). Most highway agencies recog- Percent Change (1973-1993) o Drivers iVehicles 0 Miles of Travel FIGURE 1-1 Selected highway trends, 1973-1993 (FHWA 1995, 6) (1 mile = 1.6 km).

10 BUILDING MOMENTUM FOR CHANGE Cents per Vehicle Mile of Travel (VMT) Total ExpendituresNMT Ja Capital Outlays/VMT 70 72 74 76 78 80 82 84 86 88 90 93 Year FIGURE 1-2 Trends in highway expenditures per vehicle-mile traveled (adjusted for inflation to 1994 dollars) (FHWA 1995, 7) (1 mile = 1.6 km). nize, however, that such a massive infusion of additional funds into the highway program is not imminent. Responding to the public's demand to do more to improve the con- dition of the highway system, more highway agencies are turning to the private sector to supply the innovative highway products, materi- als, and services that will be critical to meeting the growing and chang- ing demands of the next century. REFERENCES Abbreviations AAMA American Automobile Manufacturers Association DOT U.S. Department of Transportation FHWA Federal Highway Administration TRB Transportation Research Board AAMA. 1994. Facts and Figures '94. Washington, D.C. DOT. 1995. Status of the Nation's Surface Transportation System: Condition and Performance. Report of the Secretary of Transportation to Congress. FHWA, 1995. Our Nation's Highways: Selected Facts and Figures. U.S. Department of Transportation. Highway Statistics. Various years. FHWA, U.S. Department of Transportation. TRB. 1986. Special Report 211: Twin Trailer Trucks. National Research Council, Washington, D.C. TRB. 1995. Special Report 244: Highway Research: Current Programs and Future Directions. National Research Council, Washington, D.C.

2 CREATING A MARKET FOR INNOVATION Te innovations necessary to meet the growing and changing demands on the highway system in the coming years will likely involve many new technologies and concepts. Other innovations are likely to emerge from using existing products and processes in new ways and borrowing them from other fields. Given ample opportuni- ty to market and profit from their innovations, a large and vibrant pri- vate industry will respond with research and creativity to seek out new products, processes, and concepts for highway application. Whether the opportunity for such application exists in the provision of highway infrastructure, however, is a cause for concern. Although the private sector is an essential participant in the highway program, its ascribed role is typically reactive, centered around providing goods and services that are closely and often prescriptively stipulated by the public agencies it serves. The low-bid method of contracting and pro- curement, used by most highway agencies to ensure competition to produce the lowest price, compels highway agencies to define precise- ly the end product or process. A side effect of this practice is that it dis- courages bidder innovation in product quality, durability, efficiency, and other potentially valuable product attributes. Much more needs to be done to overcome this unfortunate side effect and transform the pri- vate sectors role into one that is more proactive and oriented toward innovation. BENEFITS OF INNOVATION Because many of the materials and methods for highway construction have been used for some time, the highway industry is often viewed mistakenly as a mature industry with little room for change. Yet the

2 BUILDING MOMENTUM FOR CHANGE highway program has been the beneficiary of thousands of innovative products, methods, and materials over the years, many of which have had profound and lasting effects. For example, just as construction of the Interstate system was escalating during the 1950s, the slip-form paver was introduced, causing dramatic productivity gains in concrete paving. More recently, the advent of the cold-milling machine greatly increased the speed and lowered the cost of asphalt pavement rehabil- itation. Other innovations have had more evolutionary effects; for instance, highway travel has become gradually safer over the years because of a steady stream of improvements in highway design, equipment, and roadside safety products. Highway operations and management practices have also been the subject of much innovation. Although many of these changes are unac- claimed, they have nevertheless been significant. For example, new snow plow formations, more efficient methods of applying deicing chemicals, and more sophisticated methods of managing winter main- tenance staff and equipment needs have led to important savings for state and local governments, many of which devote a large portion of their highway budgets to snow and ice control activities. In other cases, the benefits of management innovations have been difficult to measure in terms of budgetary savings but have nevertheless generat- ed significant qualitative gains. For example, such project manage- ment innovations as the use of partnering and constructability reviews, which encourage agency staff and contractors to work togeth- er on project oversight and formally integrate construction knowledge into project design and planning, are used by a growing number of highway agencies to increase the timeliness and ease of project delivery. These and thousands of other innovations in highway technology and practices have come from numerous sources. Some have their ori- gins in the cooperative and cumulative research and development efforts of the public and private sectors. The noncorrosive deicer calci- um magnesium acetate (CMA), for instance, was discovered through research sponsored by FHWA but was transformed into a commercial- ly usable product by private chemical manufacturers. The engineering, operations, and research activities of state and local highway agencies have been a critical source of innovation. The revolutionary slip-form paver, for instance, was first conceived by public highway engineers in Iowa. In the bridge field, close cooperation between highway officials and private bridge designers and builders during the past 40 years has led to the introduction and widespread use of several innovations such as prestressed and segmental bridge designs.

CREATING A MARKET FOR INNOVATION 13 The private sector is a growing source of innovation in highway technology and practices. Broadly defined, the private sector encom- passes thousands of individual businesses varying in size from multi- national corporations to single-person operations that provide prod- ucts and services ranging from tunnel and bridge construction to snow removal. Although some of the innovations from private industry, such as reflective signing materials, are apparent to the highway user, many are not. Highway agencies buy many commercial products directly from private companies, but most purchases are less direct in nature. Approximately half of all public spending for the highway sys- tem—totaling some $50 billion annually—is on highway design, con- struction, reconstruction, repair, and other work performed by private contractors, who in turn purchase materials and equipment from other businesses and hire subcontractors who do the same. As a result, a sin- gle highway construction project can involve hundreds of individual businesses providing highway-related products and services, each of which is a potential source of innovation. Whereas traditional construction contractors and material suppliers continue to be the chief components of the private highway industry, businesses from other fields are increasing their presence and contri- butions to innovations in highway technology. The highway system has always benefited from innovations introduced from other fields, ranging from high-strength reinforcing steel, first used in building construction, to computer-aided drafting and design (CADD) pro- grams, pioneered by the aerospace and defense industries. More than ever, however, state and local highway agencies—responding to public demands for products and services that will increase system capacity— are working with businesses from outside the traditional highway industry such as software and electronics firms that supply computer- ized traffic signalization programs and 'intelligent transportation sys- tems. Likewise, greater emphasis on highway system preservation, renewal, and durability has led to new business for private companies ranging from the nations largest chemical manufacturers to its small- est entrepreneurs providing noncorrosive deicing chemicals, poly- mers, and antistrip additives for pavements, temporary pavement marking materials, work-zone safety equipment, and other products and services used in highway maintenance, repair, and rehabilitation. Further diversification of highway products and services seems inevitable. Structuring the highway marketplace to accommodate and encourage this trend is a critical challenge facing the highway com- munity today.

14 BUILDING MOMENTUM FOR CHANGE IMPEDIMENTS TO INNOVATION Many of the impediments to innovation in highway technology are a consequence of the public sectors role as primary buyer of highway products and services. As owner of the system, the public sector deter- mines not only where and when roads are to be built, but also how they are to be built, the types of materials to be used, designs to be fol- lowed, and construction processes to be applied by contractors and suppliers. There are a number of reasons why the public sector operates in this restrictive manner, but perhaps the most significant is the demand for public agencies to be accountable and for public works to be open to competition. A manifestation of the desire to instill objectivity and fair- ness into the system is the practice of awarding contracts for highway products and services to the bidder offering the lowest initial price. Emphasis on low price permits highway agencies to be objective and straightforward in their appraisal of bids. To provide a basis for low- price bidding, however, agencies must provide detailed specifications for the methods and materials to be furnished. By doing so, highway agencies discourage contractors and suppliers from developing and using alternative products and methods, providing a built-in bias against private-sector research and innovation. Rigid adherence to established specifications can also increase the potential for recurrence of design and construction deficiencies and can limit experimentation with alternative practices that may be better suited to specific sites. Public-sector influence on the market for innovation is apparent in other ways. For instance, highway agencies often evaluate new high- way products for acceptance into specifications according to well- established rules and procedures that limit the authority of any one individual to influence procurement outcomes, resulting in slow and cumbersome product approval processes that discourage innovators. Likewise, restrictions that prohibit or severely restrict the ability of highway agencies to engage in sole-source procurement inhibit the development of proprietary products by contractors and suppliers and discourage highway agencies from working with individual suppliers to develop customized products and services. Working in what is gen- erally a risk-averse environment, highway officials are often unable, or unwilling, to assist private industry in overcoming these obstacles to innovation. When multiplied by the many state, county and municipal agencies

CREATING A MARKET FOR INNOVATION 15 that own and operate segments of the highway system, these varying and often conflicting demands and procedures can be especially costly and burdensome for innovators to navigate. Smaller firms in particular, which are an important source of innovation in highway technology, are most likely to be discouraged by the myriad complex and conflict- ing procurement rules, regulations, and procedures. OVERCOMING INNOVATION IMPEDIMENTS Various efforts have been made in recent years to overcome the imped- iments to innovation in the highway industry. Because of the large number of highway agencies, local experimentation with numerous procurement practices and concepts aimed at attracting new products and processes for highways has begun. Though not always successful, these efforts are gradually building familiarity with and understand- ing of measures that promise to enhance the market for innovation. Some practices aimed at spurring innovation have been in use for some time. Two-thirds of highway agencies, for instance, use value engineering clauses in some or all of their construction contracts (TRB 1995b, 13). These clauses are designed to encourage contractors to pro- pose less expensive designs or construction concepts by allowing them to share the resulting savings. Other measures designed to increase innovation and improve quality that have become more accepted in recent years include the use of rewards, or bonus payments, to con- tractors who complete a project ahead of schedule or to a final product that surpasses certain quality thresholds. These examples represent only some of the growing number of measures being employed by highway agencies to provide greater financial incentive and encour- agement for private-sector innovation. The growing number of innovative practices employed by highway agencies in the United States and abroad has led to a number of efforts aimed at gathering more information on their use and effectiveness. FHWA, for instance, has sponsored study tours of European contract- ing techniques to assess the prospects for their application in the United States (FHWA 1994). AASHTO and FHWA, through the National Cooperative Highway Research Program, have also conduct- ed a number of studies surveying and synthesizing innovative con- tracting and procurement practices ranging from use of warranties and value engineering to performance-based specifications (TRB 1994; TRB 1981; TRB 1995a). A joint public- and private-sector TRB task force

16 BUILDING MOMENTUM FOR CHANGE identified various long- and short-term actions that could be taken to expand the highway community's awareness and acceptance of inno- vative contracting techniques and practices (TRB 1991), spurring Fl-TWA (through Special Experimental Project 14) to encourage state and local experimentation with warranties, design-build, cost-plus- time bidding, and other unconventional contracting techniques. A summary of findings and recommendations from some of these activ- ities is provided in Appendix A. Several other initiatives have been launched to assist private firms—particularly small entrepreneurs—in overcoming obstacles to marketing their innovations in the decentralized and diverse highway industry. With start-up funding provided by FHWA, the Civil Engineering Research Foundation (CERF) recently established the Highway Innovative Technology Evaluation Center (HITEC), which develops nationally recognized, impartial evaluations for innovative products for which no universally accepted evaluation protocols exist. This centralized evaluation process saves time and expense for inno- vators, encouraging more rapid implementation of their products and processes. Other related activities that seek to encourage innovators include the National Transportation Product Evaluation Program and the Innovations Deserving Exploratory Analysis (IDEA) Programs, which are described in more detail in Table 2-1. These latter activities have the advantage of being continuing efforts. Because the highway industry is so large and dispersed, such enduring activities may be necessary to build momentum for creating an environment that is more conducive to innovation. SUMMARY An aging and heavily traveled highway system is increasing the demand for new products, services, and processes. Much of this inno- vation can be generated by a private sector that perceives ample incen- tive and opportunity. The challenge faced by the highway community is to provide such opportunity transforming the traditionally passive role of the private sector into one that is far more proactive and ori- ented toward innovation. Success in accomplishing this goal will require persistent and concerted efforts.

TABLE 2-1 Examples of Ongoing Activities To Foster Highway Innovation Activity Service Method or Process Benefit Financing Institutional Home Highway Innovative Develops nationally Volunteer expert panels Central screening and Entrepreneurs pay for CERF, with Technology Evaluation recognized and develop evaluation evaluation of innovative evaluation plans and oversight by Center (HITEC) impartial evaluation plans; outside laboratory products saves time and subsequent tests; HITEC HITEC Executive plans for unique testing and analysis are expense to innovators, assisting aims to be self-supporting Committee, products for which no overseen by panels; final in gaining product acceptance through fees charged; consisting of standard evaluation HITEC evaluation report and stimulating more FHWA has provided representatives methods exist distributed widely innovation in highway funding to defray from public and technology program start-up costs private sectors, academia, and research institutions National Transportation Evaluates standard NTPEP activities in each Duplication by state agencies in States pool funds for AASHTO, which Product Evaluation Program products for which test AASHTO region testing new standard products evaluations in each organizes (NTPEP) methods or protocols coordinated by reduced NTPEP region; national have already been participating states; participation voluntary oversight developed; evaluations existing facilities, committee and undertaken by single equipment, and provides staff entity serving entire personnel in state support for region or the nation agencies used for coordination of evaluations NTPEP activities Innovations Deserving Investigate and seek to Stage I concepts Prospective innovators assisted FHWA provides 75 NCHRPITRB, Exploratory Analysis (IDEA) introduce new investigated to ascertain with initial early development percent of financial which contracts Programs processes, methods, scientific and technical and introduction of promising support, and state with outside and products for validity and to new concepts and technologies, highway agencies provide researchers for highway application demonstrate sufficient thereby encouraging innovation; 25 percent; FHWA concept and through development proof of concept to merit value to highway community provides 100 percent product and testing of Stage II prototype provided by attracting funding for special development; innovative and development and innovative products, processes, Intelligent Transportation IDEA activities nontraditional concepts guidelines for practice; and ideas, especially from System IDEA Program overseen by not previously tested Stage II prototypes outside traditional bounds of expert panels evaluated under actual highway community or simulated highway applications; product cost-effectiveness and likely acceptance also evaluated

IS BUILDING MOMENTUM FOR CHANGE REFERENCES FHWA. 1994. A Summary of the Fl-TWA Contract Administration Techniques for Quality Enhancement Study Tour (CAT QEST). U.S. Department of Transportation. TRB. 1981. NCHRP Synthesis 78: Value Engineering in Preconstruction and Construction. National Research Council, Washington, D.C. TRB. 1991. Transportation Research Circular 386: Innovative Contracting Practices. National Research Council, Washington, D.C. TRB. 1994. NCHRP Synthesis 195: Use of Warranties in Road Construction. National Research Council, Washington, D.C. TRB. 1995a. NCHRP Synthesis 212: Performance-Related Speoflcations for Highway Construction and Rehabilitation. National Research Council, Washington, D.C. TRB. 1995b. NCHRP Synthesis 214: Resolution of Disputes to Avoid Construction Claims. National Research Council, Washington, D.C.

ACCELERATING CHANGE: STRATEGIC FORUM FOR INNOVATION IN HIGHWAY INFRASTRUCTURE Many of the barriers to innovation in highway technology are widespread and deeply rooted. Headway in overcoming them will require a determined and enduring commitment to fundamental changes in the way the highway community conducts business. The continuing efforts of a group of highly motivated public- and private- sector leaders challenging the status quo will help provide the enthu- siasm, support, and energy needed to accelerate these changes. The Strategic Forum for Innovation in Highway Infrastructure is warrant- ed and strongly recommended to fulfill this critical role as a catalyst to inspire and build momentum for a more vibrant and innovative high- way marketplace. MISSION OF THE FORUM The guiding mission of the Forum will be to effect positive change in the institutional environment—that is, the processes, rules, regula- tions, and established practices—that shapes the highway marketplace and its receptiveness to innovation. The Forum will focus light on key institutional barriers to innovation and steps that can be taken to remove them. Because many of these institutional barriers are complex and deeply embedded, the Forum must take a long-range and strate- gic approach; the emergence of a highway marketplace that favors innovation will take many years of incremental change. The commit- tee believes, however, that progress toward this goal can be encour- aged and hastened by the continuing and committed efforts of a strategically oriented association of highway industry leaders, deci- sion makers, and innovators. Ensuring that key decision makers rec- ognize the potential benefits of overcoming innovation impediments 9

20 BUILDING MOMENTUtI FOR CHANGE in the highway program will be an important function of the Forum. An important function of the Forum will be to inform and convince key decision makers about the importance of creating a highway mar- ketplace that demands and encourages more innovation from the pri- vate sector. Prominent and persistent support for such a goal is critical to spurring fundamental changes in laws, regulations, and practices necessary to reshape the highway marketplace in that manner. Because the highway community is so fragmented, many individu- als in the industry who favor reforms to encourage more innovation are unable to act upon this desire so that it bears meaningful results. The Forum will offer a regular and neutral setting for dispersed lead- ers in the highway community to come together to develop a more unified voice for constructive change. In particular, the Forum will serve as A neutral sounding board for private-industry and highway agency representatives to interact and exchange ideas about policies, practices, and procedures of the highway industry that tend to inhibit private-sector innovation. The Forum will offer a unique opportunity for the diverse segments of the highway community to foster their mutual desire for innovation. A constructive venue for leaders of the highway community to identify and advance specific measures aimed at fostering innovation. Although the Forums role of neutral sounding board will further the highway community's understanding of impediments to innovation, it must have a highly constructive orientation aimed at identifying and advancing promising solutions to innovation problems. The Forum could, for instance, seek out and assess best methods and practices in procurement and contracting, promoting those with significant promise. A gateway through which private companies—especially those unfamiliar with the industry—and public agencies can learn of initiatives aimed at spurring innovation, such as alternative contracting and pro- curement projects, research and development activities, technology trans- fer programs, and model procedural reforms in government agencies. MEMBERSHIP AND PARTICIPATION The Forum must entice the active involvement of prominent individu- als in the highway community who have a strong personal interest in

ACCELERATING CHANGE 21 overcoming institutional barriers to highway innovation. To ensure such commitment, Forum members should be appointed formally on the basis of their individual qualifications and commitment to innova- tion, not as designated representatives of individual organizations or industries. Membership should initially consist of at least two dozen industry leaders, encompassing the most progressive and change-ori- ented top executives and technologists from private industry, highway agency heads and top civil servants at the state and local levels, acad- emic experts in innovation and technology, key elected officials, and highway users who recognize the potential benefits of more innova- tion in highway technology. The number of Forum members may need to be modest at first to ensure active participation by members and facilitate planning of fol- low-on activities; however, this nucleus must quickly enlist the sup- port and active participation of advocates, decision makers, elected officials, experts in legal and regulatory reform, and others who can assist in assessing issues, developing recommendations, and building a constituency for implementing recommended actions and ideas. This outreach must attract individuals and organizations from outside the traditional bounds of the highway community, many of whose prod- ucts or expertise may have value for highway technology. The Forum must also seek the involvement of highway users, who are the ultimate beneficiaries of innovations that enhance highway system performance. Participation by individuals who can convey the perspectives and interests of private motorists, truckers, shippers, and other highway users will be instrumental in broadening public sup- port for encouragement of innovation in the highway industry. ORGANIZATION AND SUPPORT Several organizational alternatives were examined to identify the most suitable options for the Forum: 1. The Forum could be organized as a unit of a nonprofit, non- governmental agency such as the Civil Engineering Research Foundation (CERF), Eno Foundation, TRB, or the National Research Council. Examples of such units include the Strategic Highway Research Program, organized under the auspices of the National Research Council, and the Highway Innovative Technology

22 BUILDING MOMENTUM FOR CHANGE Evaluation Center, operated by CERF. Among the advantages of such an affiliation are immediate credibility; in-place staff support, an estab- lished national communications network, and a working relationships with many segments of the highway community. Possible disadvan- tages include constraints on the activities of the Forum and its mem- bership in accordance with the policies and requirements of the parent organization. The Forum could be organized as an advisory unit or in partner- ship with a public agency such as the Federal Highway Administra- tion (FHWA) or a government-related organization such as the American Association of State Highway and Transportation Officials (AASHTO) or the American Public Works Association (APWA). Such an affiliation would engender immediate national recognition and credibility as well as some potential leverage with state and local high- way agencies. However, this option would significantly limit the Forum's autonomy and independence and could discourage private- sector participation. The Forum could be established as a self-directed and self-staffed entity. Examples of this type of organization include the Business Roundtable and the Construction Industry Institute. Such an entity would enjoy autonomy and freedom from existing institutional proto- cols of the parent organization that might otherwise constrain Forum activities, but the organizational start-up period would likely be slow- er and more costly, requiring the hiring of staff and acquiring of facili- ties without the benefit of sharing the overhead burden with other pro- grams. A self-directed entity would also lack the early identity; com- munications structure, and credibility necessary to attract participants and generate influence. After consideration of the foregoing alternatives and variations of each, the committee recommends that the Forum be organized under the auspices of an established nonprofit, nongovernmental entity, such as a foundation, board, or institute as profiled in Option 1. The recog- nition and resources of a such a parent organization would permit the Forum to begin its activities with maximum credibility and with min- imum start-up time and expense. As the Forum evolves and its role becomes better defined, other organizational structures that enable greater independence may better accommodate its activities. At the outset, however, affiliation with an existing independent organization would offer the best prospects for early success.

ACCELERATING CHANGE 23 As users and owners of the highway system, the public stands to achieve substantial benefits from greater innovation and creativity in the highway industry. As such, modest public funding to help finance the Forum is warranted to defray the cost of staff support and other overhead expenses. To minimize these costs, financial support from the private sector may be realized through registration fees for Forum- related activities and through self-funded travel and participation. As the Forum's record of performance and benefits becomes more evi- dent, its support and organizational relationships may require reeval- uation and restructuring. In the committee's opinion, a modest public investment in the Forum concept is justified given the substantial ben- efits to be achieved from even slight improvements in the quality and rate of innovation in the highway industry. RELATED INITIATIVES In April 1996, in a follow-on to the National Performance Review, Vice President Albert Gore, Transportation Secretary Federico Peña, and Federal Aviation Administrator (FAA) David Hinson announced the creation of new personnel and acquisition systems for FAA. FAA, like many governmental agencies, has been constrained in its ability to purchase new equipment and services by competitive-bid protocols that require detailed product design specifications and that are accom- panied by regulatory and administrative requirements limiting com- munications between FAA staff and prospective contractors and sup- pliers. The revised systems are aimed at rectifying long-standing prob- lems encountered by FAA in acquiring and deploying new equipment and services—especially advanced technologies for air traffic control operations—in a more timely and cost-effective manner. Before introducing the reforms, the Vice President noted that the FAA reforms "can serve as models for reforms throughout govern- ment" and encouraged the utilization of "expertise that exists through- out the government and in the private sector" to assist in carrying out the reforms (see Appendix B). In the spirit of this effort, the Strategic Forum for Innovation in Highway Infrastructure can play a valuable role in identifying model reforms made in other agencies within the U.S. Department of Transportation and elsewhere in federal, state, and local governments that may also be suitable for application in the highway industry. The highway program accounts for more than half of the expenditures on transportation at the federal level and for the

24 BUILDING MOMENTUM FOR CHANGE majority of transportation expenditures at the state and local levels. Drawing attention to the institutional reforms needed to spur innova- tion in the highway program will be a critical role of the Forum. SUMMARY The study conmiittee recommends the establishment of a Strategic Forum for Innovation in Highway Infrastructure to convene visionary builders, designers, suppliers, technologists, owners, and users of the highway system to advocate the development of a highway market- place that demands and values innovation. A number of public-private activities initiated in recent years have increased industry cooperation and support for highway policies, pro- grams, and processes that foster innovation (see Appendix A for a summary of findings and recommendations from some of these efforts). Most of these activities, however, were short-lived. No activity of national stature and continuity has challenged the institutional status quo and sought to change the basic ways in which the highway indus- try conducts business in order to foster innovation. The Strategic Forum for Innovation in Highway Infrastructure would fill this critical gap. The Forum must attract leaders in the highway community drawn from the ranks of highway agency heads, top civil servants, academic experts in highway technological innovation, elected officials, and key executives from private industry who are eager to create a more com- petitive and creative highway marketplace. The Forum must also involve and seek the support of highway users, who are the ultimate beneficiaries of innovation. At its inception, the Forum should be organized under the auspices of an independent organization. The resources and national recogni- tion of such a parent organization would enable the Forum to begin its activities with maximum credibility and minimum start-up time and expense, offering the best chances for early success. Because the public— as principal owner and user of the highway system—stands to achieve substantial benefits from more innovation, modest public funding to aid in establishment of the Forum is warranted and recommended. More specific recommendations for launching the Forum and key issues the Forum would be well suited to address are discussed in Chapter 4.

2 LAUNCHING THE FORUM Early establishment of the Strategic Forum for Innovation in Highway Infrastructure is warranted and recommended. Discussed in this chapter are some of the specific actions that can be taken to launch the Forum, as well as several innovation issues the Forum, once initi- ated, would be well suited to address. STEPS To LAUNCH THE FORUM Because the activities of the private sector serving the highway pro- gram are largely shaped by the requirements and policies of the pub- lic agencies that fund and own the highway system, it is appropriate and imperative that highway agencies take a central role in working with private industry to create a highway marketplace that fosters innovation. Modest public-sector support for funding and initiation of the Forum will demonstrate this commitment. The Forum can be established promptly by taking the following steps. Step I FHWA and AASHTO should designate a small task group to refine the Forum concept and agree on specific funding and organizational arrangements for establishing the Forum in accordance with the basic framework outlined in this report. The task group, with the participa- tion of one or more members of the study committee, should meet with representatives of candidate parent organizations in order to select the most appropriate existing independent organization to house the Forum and to arrange the specific terms of funding, over- sight, staffing, and administration. 25

26 BUILDING MOMENTUM FOR CHANGE Step 2 The selected parent organization should appoint the initial Forum membership and leadership with significant and varied input from both the public and private sectors of the highway community. Emphasis should be placed on appointing qualified individuals rather than designating representatives of organizations in order to ensure commitment to the Forum and its mission. Members with varied back- grounds and prominent stature within the highway community should be appointed. Nominations should be sought from FHWA and AASHTO members, as well as organizations representing county and municipal highway agencies and toll authorities (such as the American Public Works Administration and the National Association of County Engineers) and the broad array of individuals, industries, and organiza- tions in the private sector interested in advancing the mission of the Forum. To build on the Forum concept, one or more members of the study committee should be considered as candidates for initial membership. Step 3 The Forum membership should meet to identify key innovation issues to be addressed and plan the initial activities and potential products of the Forum. To attract innovative and influential members, the Forum membership should be given significant latitude to select the issues it will address, tailor its activities and products, and determine the kinds of individuals and constituencies that should be invited or encouraged to participate in Forum meetings and activities. The first meeting of the Forum membership should be convened as soon as feasible to sus- tain and strengthen current interest in the initiative. ISSUES AND OPPORTUNITIES FOR THE FORUM Soon after its initiation, the Forum should begin to focus on a well- defined set of key innovation issues. As discussed earlier, there are a number of impediments to innovation in the highway industry. Attempts to address all of these impediments concurrently and in a short period are not likely to achieve the success anticipated. A more practical approach would be to focus on a few critical high-priority

LAUNCHING THE FORUM 27 areas in which prominent and persistent attention can effect gradual and productive change. In the study committees view, a significant long-term challenge fac- ing the highway community is to reshape the procurement process for highway goods and services to encourage and demand innovation. Achieving this outcome will require debate and assessment of a num- ber of long-standing concerns about potential barriers to innovation, such as the effect on innovation of prescriptive material and method specifications, the separation of highway design and construction activities, the absence of meaningful warranty programs, and the emphasis on low cost as the central criterion for evaluating construc- tion bids and awarding contracts. As discussed next, the Forum would offer an opportunity for the highway community to tackle some of these innovation issues in a more systematic and enduring fashion. Specifications To Encourage Performance and Reward Innovation The chief means by which highway agencies purchase goods and ser- vices from private industry is through a competitive bidding process in which agencies stipulate the design, materials, and construction methods. This highly prescriptive procurement system has been the subject of criticism over the years because it does not permit consider- ation of new products and processes that may be superior to those specified. An alternative to the traditional material-and-method-based system specification is one that defines the required performance of the final product without requiring a specific material or construction process to achieve that performance. Among the potential advantages to spec- ifications based on performance is the reduced need for agencies to develop detailed specifications and ensure conformity with them through periodic testing and inspection during the course of the proj- ect. Perhaps the most important advantage, however, is that the emphasis on performance encourages innovation and ingenuity in the development and delivery of the product. Given the opportunity to furnish a product on the basis of a performance requirement, contrac- tors and suppliers have a greater incentive to develop new materials and construction processes that give them a competitive advantage.

28 BUILDING MOMENTUM FOR CHANGE Most performance-based specifications, however, lack developmen- tal work and experience in field use. The advent of procurement sys- tems that use performance-based requirements has been slowed by the absence of established criteria for predicting long-term product per- formance using short-term measures, the need for suppliers and con- tractors to receive payment well before long-term performance is determined, and the general difficulties encountered in changing established routines and procedures. Various issues and questions need to be addressed more thoroughly before performance-based con- cepts can be adopted for more general use in the highway industry, including the following: What components of the highway are best suited to performance measurement? What types of criteria should be used to predict or measure long- term performance; when, where, and how often should they be assessed; and how should they be warranted? How should highway agencies reliably predict and measure per- formance while accounting for traffic conditions and other environ- mental factors? How can performance requirements be structured to realize their objectives without adversely affecting the construction industry? In the United States and abroad, various efforts are under way to investigate and resolve some of these outstanding issues. Although much work still needs to be done, the study committee believes that there is potential for significant benefits to be derived from the well- placed use of performance-based measures, and therefore a substantial and concerted national effort to improve the state of the art may be warranted. The Forum could aid in this endeavor by holding a contin- uing series of meetings and briefings with national experts to identify opportunities for using performance-based specifications, developing action plans for refinement and implementation of performance-based concepts, and disseminating information on the effective applications of these concepts. Integration of Design and Construction To Foster Innovation Another consequence of the current highway project development sys- tem is that highway designers and builders seldom work in concert on

LAUNCHING THE FORUM 29 projects. In most cases, builders bid on highway construction projects on an 'as-designed' basis. This practice can lead to difficulties with design implementation and constructability, and may cause construc- tion delays, costly disputes, change orders, and budget overruns. Most pertinent to innovation, this practice denies builders the opportunity to suggest changes in configurations, materials, and construction methods that may increase construction efficiency and product quality. Highway agencies have come to recognize the problems inherent in distancing design from construction and are beginning to investigate ways to better coordinate the two activities. Some agencies are using construction engineering consultants to review designs for con- structability in advance of seeking construction bids. In other instances, agencies are experimenting with use of a single contractor for the design and construction of a project, including warrants for the quality of the end product. Value engineering (as discussed in Chapter 2) is an example of another practice often employed to improve coor- dination and cooperation among designers, contractors, and owners. Integration of design and construction may offer several advan- tages on appropriate projects. In addition to reducing potential con- flicts between designers and builders, it may lead to expedited project delivery by allowing some construction work to begin before final design details are completed. More important, integration of design and construction may permit the contracting team to employ innova- tive designs, materials, and construction systems in order to maximize project efficiency, increase the quality of the final product, and achieve other desirable advantages. From the perspective of the highway agency, an integrated design and construction project can reduce agency inspection and quality control operations, since these functions must be performed by the contracting team under warranty obligations. Successful experiences by foreign highway agencies in integrating design and construction and in other domestic public works (such as transit systems, water and waste water treatment plants, and toll roads and bridges) have increased interest in them by the U.S. highway com- munity. However, a number of concerns still need to be resolved before these concepts will be embraced by the highway community at large. These include development of better criteria and guidelines for selecting appropriate projects, prequalifying contracting teams, and controlling competitive bidding costs; equitable balance of risk sharing between owners and contractors; retention of appropriate relation- ships between agencies and professional engineering designers; and award of contracts on an objective and quantifiable basis.

30 BUILDING MOMENTUM FOR CHANGE Concepts aimed at strengthening the coordination and integration of design and construction hold the potential for innovation improve- ments in construction products and processes, as well as savings in project time and costs. If the Forum believes the potential benefits derived are of sufficient significance, it could provide a national focus for further development of these concepts and encourage greater pub- lic- and private-sector collaboration in creating a more objective and hospitable environment for their use and evaluation. Expansion of Bid Criteria To Spur Innovation The increasing need to repair and reconstruct a heavily traveled high- way system is causing many highway agencies to seek new ways of completing projects in a more timely manner. Meanwhile, a diversified and increasingly sophisticated construction industry is capable of offering a wider range of construction methods and technologies that can achieve this goal. What is hindering some highway agencies and builders from taking advantage of these new construction techniques and concepts is the traditional system of awarding contracts on the basis of low bids. The customary means by which highway construction contracts are evaluated and awarded is through a process in which low initial price (often referred to as "first price) is the predominant factor. Among the advantages of low first price as a central criterion is that it is a simple quantitative measure that assures contractors fair and consistent bid assessments and promotes administrative efficiency by providing public officials with a straightforward and impartial evaluation metric. A disadvantage of this practice, however, is that it generates simple price competition with little emphasis on product timeliness, quality, and durability. In recent years, a number of alternative contracting methods have been introduced to the highway industry that address some of the dis- advantages of low-first-price bidding while preserving some of the key benefits. Two examples are cost-plus-time bidding (or the A + B method) and the lane rental method, described in the accompanying box. These alternative contracting techniques incorporate the value of time and traffic impacts as additional criteria for determining the low- est bid, giving contractors an incentive to develop innovative ways of structuring projects that minimize total cost. Meanwhile, these alter-

COST-PLUS-TIME BIDDING Cost-plus-time bidding, also referred to as the A + B method, involves time, with its associated cost, in the low-bid determination. With this method, each bid submitted consists of two components: The cost of the A component is the traditional bid for the contract items, the dollar amount for all work to be performed under the contract. The time, or B component, is an estimate by the bidder of the total number of calendar days required to complete the project. The bid for award consideration is based on a combination of the bid for the contract items and the associated cost of the time according to the following formula: (A) + (B x road user cost/day) This formula is only used to determine the lowest bid for award and is not used to determine payment to the contractor. A disincentive provision, which assesses road user costs, is incorpo- rated into the contract to discourage the contractor from overrunning the time bid for the project. In addition, an incentive provision is usually included to reward the contractor if the work is completed earlier. The value of the road user cost is predetermined by the contracting agency and specified in the proposal. It is based on costs such as road user delay time, any detours, construction engineering, and so on. LANE RENTAL Like cost-plus-time bidding, the goal of the lane rental concept is to encourage contractors to minimize effects on road users during con- struction. Under the lane rental concept, the contract includes a provi- sion for lane rental fee assessment. This fee is based on estimated cost of delay to the road user during the construction period. The fee is assessed for the time that the contractor occupies or obstructs part of the roadway and is deducted from the monthly progress payments. The rental fee rates are stated in the bidding proposal in dollars per lane per time period, which could be daily, hourly, or in fractions of an hour. Neither the contractor nor the contracting agency indicates the anticipated amount of time for which the assessment will apply, and the low bid is determined solely on the lowest amount bid for the contract items. The intent of lane rental is to encourage contractors to schedule their work to keep traffic restrictions to a minimum, both in terms of duration and number of lane closures. This concept has merit for projects that sig- nificantly affect the traveling public, such as major urban-area projects. Source: FHWA

32 BUILDING MOMENTUM FOR CHANGE native contracting techniques still have the advantage of offering objective and quantifiable criteria for contractors to develop bids and for public officials to judge them. The study. committee believes, in concurrence with the findings of many previous studies and reports, that the highway community would be well served by employing a wider variety of highway con- tracting techniques to meet the changing conditions under which highway projects are being constructed. Many alternative contracting and bidding practices, such as cost-plus-time bidding, continue to be based on the quantifiable, low-bid system while offering greater opportunity for the highway community to tap the creative potential of private industry more deeply and begin to gain valuable experience with contracting techniques other than the simple low-price method. Some of these contracting practices have a significant base of expe- rience, whereas others do not. The Forum can assist the highway com- munity by promoting the use of those innovative practices that have significant potential to foster innovation and supporting greater research and development to generate other innovative contracting concepts that have promise. SUMMARY The Forum for Innovation in Highway Infrastructure should be estab- lished at an early date under the auspices of an independent organiza- tion with modest public-sector funding for a start-up period. The Forum should be a formally appointed body charged with identifying key issues to be addressed and with planning the attendant activities and products. Designation by the sponsors of a parent organization to house the Forum, appointment by the parent organization of Forum leadership and membership, and planning of initial Forum activities are the next steps necessary to launch the Forum. Use of performance- based specifications and concepts, integration of design and construc- tion activities, and expansion of criteria for awarding contracts should be candidate issues for early consideration by the Forum membership.

APPENDIX A KEY FINDINGS AND RECOMMENDATIONS FROM PREVIOUS STUDIES During the course of its deliberations the committee reviewed reports from a number of recent studies addressing highway innova- tion issues and impediments. The preponderance of these studies helped convince the committee that rather than another study that urges specific measures to promote innovation, what is needed is a prominent and strategic body that actively and persistently promotes the adoption of promising innovation measures and practices, includ- ing many that have been proposed in previous reports. Discussed in the following sections are some of the important recent reports on highway innovation issues, with their key findings and rec- ommendations, which will likely be of value to the Forum in refining its mission objectives and identifying'specific issues for early emphasis. NCHRP SYNTHESIS 149: PARTNERSHIPS FOR INNOVATION: PRIVATE-SECTOR CONTRIBUTIONS TO INNOVATION IN THE HIGHWAY INDUSTRY (TRB 1989) To determine what activities public agencies are currently undertaking to bring private industry into the highway research and development effort as well as into the innovation process, a survey was made of state highway agencies and transportation departments. Respondents reported that new technologies are needed to contain highway pro- gram costs and to improve the performance of the highway system, which faces major challenges as an aging and often overloaded high- way system causes agencies to shift their focus to maintenance and reconstruction. Although continued public funding for research was 33

34 BUILDING MOMENTUM FOR CHANGE anticipated, more significant contributions from the private sector were viewed as essential to keeping pace with changing demands. The significant contributions by private industry to highway tech- nology are detailed, but the full potential for technological advance- ment through the private sector has not been realized. To bring about this needed improvement, positive action by the private sector is need- ed. To meet this need, consideration should be given to steps such as the following: Centralization of testing and approval of innovative highway products offered by private industry; Development and incorporation of value engineering clauses in highway contracts for construction, maintenance, and rehabilitation; Refinement and expansion of the use of quality bonuses as an incentive to contractors to perform above the minimum specifications and other contract-based quality controls; Development of tools for managing performance-based specifica- tions and life-cycle cost analyses for use in awarding contracts; and Drafting and periodic updating of a list of research needs that rep- resents a national consensus (public and private) on gaps in highway technology. The conclusion of the report is that highway agencies and private industry must collaborate to find new and effective ways to foster and introduce innovation. Through such partnership efforts the challenges of international competition and the ever-increasing need for addi- tional capacity, economical service, and safety on the highway system can be met. CIRCULAR 386: INNovATIvE CONTRACTING PRACTICES (TRB 1991) In 1987 TRB created a task force to identify promising innovative con- tracting practices for further evaluation. Task force members, drawn from both the public and private sectors of the highway industry, were charged with investigating state-of-the-art contracting methods and techniques and recommending potential areas of improvement in cur- rent practice. Four major topics were addressed: bidding procedures, material control, quality considerations, and insurance and surety

APPENDIX A 35 issues. A number of short-term and long-term actions were recom- mended in each of these areas, including the following: Cost-plus-time bidding concepts should be considered for wide implementation, provided there is careful selection of project types and accurate determinations of time valuations; The potential for use of warranties and guarantees should be investigated further; Greater attention should be paid to constructability testing through project design; Research, development, and implementation programs should be established to investigate design-build concepts; A national research program should be undertaken and a proce- dural guide should be developed to aid in transitioning from method specifications to performance-based specifications; A contact point should be created to publicize the benefits of per- formance-based specifications and other innovative practices; Performance-based specifications should consider incentive and disincentive provisions to encourage quality; and Periodic forums should be considered in which the highway com- munity can share experiences, enabling communication and coopera- tion necessary for progress in removing innovation barriers. The task force report concluded by noting that the highway com- munity cannot afford to neglect opportunities for new products and processes and that highway agencies will ultimately have to modify their standard practices to provide such opportunities. FHWA STUDY TOUR OF CONTRACT ADMINISTRATIVE TECHNIQUES FOR QUALITY ENHANCEMENT (FHWA 1994) FHWA initiated a study tour to explore promising European contract- ing techniques. A team of public- and private-sector representatives from the U.S. highway industry visited four European countries. The four main areas of emphasis were (a) project development and design procedures, (b) contract award procedures, (c) construction quality control techniques, and (d) quality assessment and performance eval- uation. On the basis of the successful experiences in these countries,

36 BUILDING MOMENTUM FOR CHANGE the study team recommended that U.S. highway agencies emphasize the following: Promotion of quality-oriented research and development, Reduction of regulations that restrict quality improvements, Use of life-cycle costing for projects, Allocation of more funds for preventive maintenance, and Design of quality into highways rather than trying to build it in later. The study team also recommended that highway agencies consider the use of alternative bid proposals within the general low-bid frame- work as well as several other specific innovation-inducing measures such as value engineering and partnering. FINAL REPORT OF TRB TASK FORCE ON HIGHWAY RESEARCH IN INDUSTRY The Task Force on Highway Research in Industry was created by TRB in 1990 to explore ways by which the highway industry can expand future opportunities and incentives for greater private-sector involve- ment in highway technological advances. The task force, which con- sisted of top researchers, technologists, and executives from the pri- vate sector of the highway industry, identified a number of actions that should be considered to enhance innovation and overcome some of the institutional impediments, including actions that address the follow- ing major impediments: Procurement Process and Constraints: Measures were identified for increasing the use of performance-based specifications, warranties, life-cycle costing, and tort liability laws. Public Relations, Information, and Education: Action items addressed the need to improve understanding of product acceptance processes by private entrepreneurs; to simplify and expedite these processes; and to educate top officials to take such action to accelerate innovation. Incentives and Cooperative Activities: Measures were identified to encourage more risk taking by public officials, explore concepts for cost-shared research between the public and private sectors, and eval- uate the efficacy of bonus and incentive payment for contractors to provide an incentive for innovation.

APPENDIX A 37 Testing and Product Evaluation: The development of a national product evaluation program was recommended along with the advent of more standard procedures for product evaluation and acceptance. The task force also recommended further evaluation of a joint pub- lic- and private-sector activity that would provide a mechanism for collective action and cooperation by individuals and organizations from the public and private sectors who are interested in enhancing innovation opportunities in highway technology. The task force final report may be obtained through the TRB Library. REFERENCES FI-IWA. 1994. A Summary of the FHWA Contract Administration Techniques for Quality Enhancement Tour (CAT QEST). U.S. Department of Transportation, Washington, D.C. TRB. 1989. NCHRP Synthesis Report 149: Partnerships for Innovation: Private-Sector Contributions to Innovation in the Highway Industry. National Research Council, Washington, D.C. TRB. 1991. Circular 386: Innovative Contracting Practices. National Research Council, Washington, D.C.

AFF•'E,NDIX.. B LETTER FROM VICE PRESIDENT OF THE UNITED STATES TO ADMINISTRATOR OF FEDERAL AVIATION ADMINISTRATION ENCOURAGING INNOVATION REFORMS (FACSIMILE) THE VICE PRESIDENT WASHINGTON, D.C. November 30, 1995 Honorable David R. Hinson Administrator Federal Aviation Administration 800 Independence Avenue, S.W. Washington, D.C. 20591 Dear David: Implementation of the personnel and procurement reforms in the transportation appropriations bill will be a key milestone in our continuing efforts to bring fundamental changes to the Federal Aviation Administration (FAA). The ability to deploy the latest technologies and to have a well-trained and mobile workforce will be critical in ensuring the long-term safety and efficiency of the air traffic control system. Beyond their importance for the FAA, these reforms also can serve as models for reforms throughout government [emphasis added]. I want you to know that the full resources of the Administration are available to you in designing and carry- ing out these reforms, and I encourage you to utilize the expertise that exists throughout the government and in the private sector. This should be a time to be bold, to find the best corporate practices and put them into place for the government. Your considerable experience as business leader should be of great value as you lead this process. Given the importance of these reforms, their development should be a top priority for you and the senior management of the FAA. It is critical; that the employees of the FAA and their representatives be fully involved in the design and implementation of these systems. I have been struck by the tremendous efforts of dedicated FAA employees to maintain aging equipment and provide the critical services demanded of them. Much of our focus in bringing change to the FAA has been to give employees the tools that they need to effectively carry Out their important responsibilities. These employees and their representatives have been, and will continue to be, critical to the success of any reforms. The tasks at hand are obviously ambitious, and will be important parts of our efforts to make government work better and cost less. I commend you and the employees of the FAA for your diligence and commitment, and look forward to the implementation of these important reforms. Sincerely, Al Gore (signed) 38

STUDY COMMITTEE BIOGRAPHICAL INFORMATION LOWELL B. JACKSON, Chairman, is recently retired Vice President of Transportation for Greenhorne & OMara, Inc., a transportation design and planning consulting group. Previously he served as Deputy Director of the Federal Highway Administration from 1988 to 1989 and as Executive Director of the Colorado Department of Highways dur- ing 1987. From 1979 to 1981 and 1983 to 1986, he was Secretary of Transportation for Wisconsin. His other experience includes Secretary of Labor, Industry, and Human Relations for Wisconsin in 1981 and 1982. Concurrent with his government service, he served on the National Governors Association (NGA) Subcommittee on Employ- ment and Training and the Staff Advisory Council of NGAs Transpor- tation, Communications, and Technology Committee. He has also served on numerous committees of the American Association of State Highway and Transportation Officials (AASHTO), including the AASHTO Policy Committee. Mr. Jackson was on the teaching faculty of the Department of Civil Engineering at the University of Wisconsin—Extension from 1965 to 1978 and in the Department of Civil Engineering at Purdue University from 1957 to 1961. He served as Chairman of the TRB Executive Committee in 1987 and as Vice Chairman in 1986. He earned his bachelors and masters degrees in civil engineering from Purdue University. GARY R. ALLEN is Director of the Virginia Transportation Research Council of the Virginia Department of Transportation. He has worked for the Council as a senior research scientist for more than 20 years, specializing in economics, administration, and management issues. He has served on several TRB committees, including the Committee on Transportation Economics and the Committee on Conduct of Research. He is currently chairman of the NCHRP Project Panel on 39

40 BUILDING MOMENTUM FOR CHANGE Valuation of Travel Time Savings and Predictability in Congested Conditions for Highway User-Cost Estimation and the Project Panel on Development of an Innovative Highway User-Cost Estimation Procedure. He is also a former member of the NCTRP Project Panel on Simplified Guidelines for Evaluating Transit Options in Small Urban Areas and a member of the AASHTO Cost Allocation Guide Project Advisory Panel. Dr. Allen earned his bachelors degree from Berea College and his Ph.D in economics from the University of Virginia. LAWRENCE F. AYERS is Executive Vice President for Utilities and Mapping Sciences at Intergraph Corporation. He joined Intergraph in 1987 as Vice President of International Federal Marketing. He began his 30-year career with the Department of Defense as Research Engineer in the U.S. Army Corps of Engineers Engineering Research Development Agency and progressed through a number of scientific and management positions in the Defense Intelligence Agency before becoming a principal member of the organizing group of the Defense Mapping Agency (DMA) in 1971. From 1982 to 1987, he was Civilian Director of the DMA. He was Director of DMAs Production Program from 1979 to 1982, Technical Director for the Aerospace Program from 1974 to 1979, and Director of Research and Development from 1972 to 1974. He is a member of the Board of Directors of the National Center for Geographic Information and Analysis, is active in the American Congress of Surveying and Mapping and the American Association of Geographers, and is a member of the National Research Council Committee on Mapping Science. In both 1983 and 1987, Mr. Ayers received the President's Award as Distinguished Federal Executive for his work in modernizing the mapping and geographic information systems of the Department of Defense. Mr. Ayers earned his bachelor's degree in civil engineering from the Virginia Polytechnic Institute and his master's degree in public administration from Indiana University. CRAIG A. BALLINGER is President of Craig Ballinger & Associates, a con- sulting engineering company that provides technical services on research, development, and uses of new materials and structural con- cepts and products for construction. From 1989 to 1991, he was Senior Engineer with Wilbur Smith Associates. From 1957 to 1989, he was Research Manager in the Structures Division of the Office of Research and Development, Federal Highway Administration. He serves on several technical committees of the American Concrete Institute,

STUDY COMMITTEE BIOGRAPHICAL INFORMATION 41 including the Committees on High Strength and Specialty Concretes and on Fiber Reinforced Plastic Reinforcing Bars. He is a member of the Prestressed Concrete Institute (ACI) Committee on Industry Research and Past President of the National Capital Chapter of ACT. He serves on the American Society of Civil Engineers Structural Plastics Research Council, Subcommittee on Advanced Composite Materials, and Reinforced Concrete Research Council. Mr. Ballinger is currently chairman of the TRB Committee on Structural Fiber Reinforced Plastics and is a member of the Committee on Bearings and Sealants. He earned his bachelor's degree from the University of Michigan and his master's degree in civil engineering from the University of Washington. JOHN M. BARSOM is Senior Consultant for Metallurgical and Structural Performance for U.S. Steel Corporation, the highest technical position in the organization. Before attaining his current position, he served as Senior Research Consultant and Chief of the Materials Technology Division of U.S. Steel. Dr. Barsom is an adjunct professor in the Civil Engineering Department of the University of Pittsburgh and has taught courses on fracture mechanics for bridge design for the Federal Highway Administration. Before joining the Research Laboratory of U.S. Steel in 1967, he worked in the Glass Research Laboratory of Pittsburgh Plate Glass Industries. He received the Award of Merit from the American Society for Testing and Materials (ASTM) in 1977 and is a fellow of the Society, serving on several ASTM technical committees. He also serves on committees of the American Society for Metals, the American Welding Society, the American Iron and Steel Institute, and the American Society of Mechanical Engineers. Dr. Barsom served on the TRB Task Force on Highway Research in Industry. He earned his bachelor's and master's degrees and Ph.D in mechanical engineering from the University of Pittsburgh. JON A. EPs is Professor of Civil Engineering at the University of Nevada—Reno. He joined the faculty in 1975 and was Chairman of the Department of Civil Engineering from 1984 to 1986. He began his aca- demic career as Assistant Professor of Civil Engineering at Texas A&M University. Dr. Epps has served on several TRB committees, as Chairman of the Committee for the Project to Develop an Asphalt Paving Handbook and as a member of the Strategic Highway Research Program Committee. He is a member of many professional associa-

42 BUILDING MOMENTUM FOR CHANGE tions, including the American Association for the Advancement of Science, the American Society of Civil Engineers, the Association of Asphalt Paving Technologists, the American Society for Testing and Materials, and the National Society of Professional Engineers. He is a registered professional engineer in the state of Texas. Dr. Epps earned his bachelor's and master's degrees and doctorate in civil engineering from the University of California, Berkeley. EUGENE J. FASULLO is recently retired Director of Engineering and Chief Engineer of The Port Authority of New York and New Jersey. In this position he supervised all engineering for the Port Authority and directed reconstruction of The World Trade Center after the February 1993 bombing. From 1984 to 1992 he was Deputy Director of Engineering and Deputy Chief Engineer. He began his career with Port Authority in 1958, serving in a number of positions including Assistant Chief Engineer of Design and Research, Chief Structural Engineer, Assistant Chief Structural Engineer, and Senior Design Engineer. Mr. Fasullo has been active in many professional associa- tions, serving on the Concrete Industry Board, the New York Building Congress, and the Greater New York Construction Council. He has received many awards and honors, including the Distinguished Service Medal from the Port Authority in 1989, Engineer of the Year Award from the New York Society of Engineers in 1993, and the President's Medal from the American Society of Civil Engineers in 1993. He was elected to the National Academy of Engineering in 1994. Mr. Fasullo earned his bachelor's degree from Brooklyn Polytechnic Institute and his master's degree in civil engineering from the University of Illinois at Urbana-Champaign. H. JoNATHAN FRANK is President of Morgun Venture, Ltd., which pro- vides consulting services to companies interested in the marketing and sales of new products in the highway and transportation industries. He was previously Vice President for Marketing and Sales for Barrier Systems, Inc., which supplies highway agencies with movable con- crete barriers. He also was Vice President for Marketing and Sales at Reflexite Corporation, which produces reflective highway signing and marking materials; the Onmicon Corporation; and Rowland, Inc. Mr. Frank has worked closely with highway agencies to develop national, state, and local specifications that foster the market for innovative highway products. He is a member of the Technical Committee on

STUDY COMMITTEE BIOGRAPHICAL INFORMATION 43 Construction and Maintenance of the National Committee on Uniform Traffic Control Devices and President of the Industry Division of the Institute of Transportation Engineers and on its Board of Direction. He is Director of the American Road and Transport Builders Association and President of its Transportation Safety Division. He is also Chairman of ASCE's Executive Committee for HITEC. He served on the TRB Task Force on Highway Research in Industry. Mr. Frank earned his bachelors degree from Brown University. DONALD R. GALLAGHER is President of Gallagher Asphalt Corporation, Thornton, Illinois. He began his career as a researcher with Acme Steel in 1956 before serving in the Army Ballistic Missile Agency for two years. He began working at Gallagher Asphalt in 1959 as an engineer in the field and in asphalt plants. He held several supervisory posi- tions in the company before being named President in 1992. Mr. Gallagher has been active in the National Asphalt Pavement Association, serving as Chairman of its Quality Assurance Committee for several years. He has served as President of the Illinois Asphalt Pavement Association and as a member of the Association of Asphalt Paving Technologists. Mr. Gallagher earned his bachelors degree in mechanical engineering from Purdue University. GARY L. GODBERSEN is President and Chief Executive Officer of GOMACO Corporation and President of GOMACO International, a manufacturer of construction equipment. He was previously Executive Vice President of GOMACO Corporation from 1965 to 1986. He is also President and Chairman of the Board of Highway Bridge, Inc., BOBALEE Hydraulics, and GOMACO Trolley Company. From 1962 to 1986 he was Vice President and since 1986 has been President of Godbersen-Smith Construction Company. He has served as a Director of the Construction Industry Manufacturers Association since 1973 and served as its President in 1982 and Chairman in 1983. He is also a Director of the American Road and Transport Builders Association, serving as its Chairman in 1985 and 1986. He is current- ly Vice Chairman of the International Road Federation and Chairman of the National Road Association. He has served on TRBs Committee on Construction Equipment since 1978. Mr. Godbersen earned his bachelor's degree in business administration and construction engi- neering from Iowa State University.

44 BUILDING MOMENTUM FOR CHANGE ELIZABETH L. HOMER is Deputy Administrator of the Maryland State Highway Administration. In this position, she is responsible for over- sight of agency research activities and has major operational responsi- bility in fostering innovation and total quality management. Before attaining her current position in 1990, she was Assistant Secretary for Administration for three years and Capital Program Manager for four years in the Maryland Department of Transportation. She has also held positions in the Maryland Mass Transit Administration, including manager and coordinator of the state's small transit programs. She is a member of the NCHRP Project Panel studying approaches to facilitate implementation of research findings. Ms. Homer earned her bache- lor's and master's degrees in political science from Bryn Mawr College. CHARLES R. MAREK is Technical Director of the Construction Materials Group, Vulcan Materials Company. Before attaining his current posi- tion in 1986, he was Construction Materials Engineer for Vulcan Materials for 14 years. From 1967 to 1972 he was an Assistant Professor of Civil Engineering at the University of Illinois and a research and teaching assistant from 1964 to 1967. He is a member of the American Society of Civil Engineers, the Association of Asphalt Paving Technologists, and the American Society for Testing and Materials. He is a member of the TRB Committee on Mineral Aggregates and served on the TRB Task Force on Highway Research in Industry. He is a reg- istered engineer in Illinois and Alabama. Dr. Marek earned his bache- lors degree and doctorate in civil engineering from the University of Illinois. PETER J. NICHOLSON is President of PJ Nicholson Consulting, which specializes in new technology and constructability of deep founda- tions. Until 1994 he served as Chief Executive Officer of Nicholson Construction Company, a nationwide specialty geotechnical contrac- tor. He is responsible for the planning, operations, development, mar- keting, and finance departments of the corporation's subsidiaries and field offices. Following service in the U.S. Army, he joined Nicholson Pile Company as a supervising field engineer. He designed and devel- oped rotary drilling equipment capable of placing holes for large ground anchors at multiple angles and pioneered use of in situ earth reinforcement (soil nailing) in the United States. He is a member of the American Society of Civil Engineers, serves as Trustee of the Deep

STUDY COMMITTEE BIOGRAPHICAL INFORMATION 45 Foundations Institute, is a Director of the Associated Pennsylvania Constructors, and is Director and Past President of the Constructors Association of Western Pennsylvania, a chapter of the Associated General Contractors of America. Mr. Nicholson received the Civil Engineer of the Year Award from the American Society of Civil Engineers (Pittsburgh Chapter) in 1986 and the Martin A. Kapp Award in 1992. He earned a bachelor's degree in civil engineering from the University of Notre Dame. CHARLES P. OLEARY, JR. is past Commissioner of the New Hampshire Department of Transportation, a position he held from 1990 to 1994. He was previously Chief Operating Officer of the Chemical Fabrics Corporation, a materials technology company with interests in archi- tectural structures. He is a member of the corporation's Board of Directors and its Executive Vice President from 1981 to 1989. He was previously the Treasurer and Vice President for Manufacturing and Finance. From 1971 to 1979, he was President of the Green Mountain Furniture Company. He served in the U.S. Navy's nuclear submarine service from 1963 to 1969. Mr. O'Leary was a member of the AASHTO Executive Committee and is Chairman of the AASHTO Standing Committee on Research (SCOR). He is also a member of the TRB Executive Committee. Mr. O'Leary earned his bachelor's degree in engineering from the U.S. Naval Academy and his master's degree in business administration from Dartmouth College. ERNEST K. OTT is Transportation Market Manager for Environmental Systems Research Institute (ESRI), which provides information and computer systems technologies to transportation agencies and indus- try transportation firms. In this position, he is responsible for coordi- nating ESRI's marketing, consulting, applications, and product depart- ments for surface transportation. He previously worked as Public Sector Product Manager at IBM, responsible for IBM contracts with the U.S. Department of Transportation on Intelligent Vehicle-Highway Systems (IVHS), electronic toll collection, and traveler information sys- tem projects. At IBM he also assisted in the justification and develop- ment of software products and training materials for state and local highway agencies and public transit agencies. He is a member of ITS America's Advanced Public Transportation Systems Committee and the Operations Committee of the International Bridge, Tunnel, and Turnpike Association. Mr. Ott earned his bachelor's degree in econom-

46 BUILDING MOMENTUM FOR CHANGE ics from the University of Maryland and his masters degree in busi- ness administration from Duke University. CHARLES F. Porrs is President and Chief Executive Officer of APAC, Inc., and Senior Vice President of Ashland Oil, Inc. Before attaining his current positions he was an APAC division president, regional vice president, senior vice president, and chief operating officer. He also served as manager of the research and development laboratory of Vulcan Materials Company. He began his career with the Florida Department of Transportation, where he was responsible for research in asphalt materials and mixtures and pavement performance. Mr. Potts is a member of the National Center for Asphalt Technology at Auburn University and the National Association of Asphalt Paving Technologists. He is a member of the TRB Strategic Highway Research Program Committee, the Committee on Characteristics of Bituminous Pavements, and the NCHRP Project Panel on Field Procedures and Equipment to Implement SHRP Asphalt Specifications. Mr. Potts earned his master's degree in civil engineering from West Virginia University. THOMAS F. REYNOLDS is Manager of Asphalt Sales for Amoco Oil Compnay's Whiting Refinery. He has held various sales and manager- ial positions with Amoco, including Field Sales Manager, Commercial Sales Engineer, and Jet Fuel Manager. In his current position, he works with Amoco's research chemists and chemical engineers to develop petroleum products that meet the needs of asphalt makers and high- way contractors. He has been active in the Asphalt Institute, serving as its Chairman in 1994 and as Vice Chairman in 1993. Mr. Reynolds earned his bachelor's degree in engineering from the University of Wisconsin. RICHARD L. TUCKER is Director of the Construction Industry Institute and C.T. Wells Professor of Project Management at the University of Texas at Austin. Before joining the faculty of the University of Texas at Austin in 1976, he was Associate Dean of Engineering and Director of the Construction Research Center at the University of Texas at Arlington, Vice President for Research at Luther Hill and Associates, and project engineer for Engineering Science Consultants in Austin. He is a member of the Construction Research Council and the Civil Engineering Research Foundation of ASCE and the Board of Directors

STUDY COMMITTEE BIOGRAPHICAL INFORMATION 47 of the International Association for Automation and Robotics in Construction. He is a past member of the Executive Committee of the Building Research Board of the National Research Council and Chairman of the ASCE Technical Council on Research. He has received numerous awards, including the Construction Education Award from the National Society of Professional Engineers in 1993. He was elected to the National Academy of Engineering in 1996. Dr. Tucker earned his bachelors and masters degrees and doctorate in civil engineering from the University of Texas.

The Transportation Research Board is a unit of the National Research Council, which serves the National Academy of: Sciences and the National Academy of Engineering. The Board's purpose is to stimulate research concerning the nature and performance of transportation sys- tems, to disseminate the information produced by the research, and to encourage the application of appropriate research findings. The Board's program is carried out by more than 400 committees, task forces, and panels composed of nearly 4,000 administrators, engineers, social scientists, attorneys, educators, and others concerned with transportation; they serve without compensation. The program is sup- ported by state transportation and highway departments, the modal administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of trans- portation. The National Academy of Sciences is a private, nonprofit, self-per- petuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and tech- nology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientif- ic and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its admin- istration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wuif is interim president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertain- ing to the health of the public. The Institute acts under the responsi- bility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of sci- ence and technology with the Academy's purpose of furthering knowl- edge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engi- neering communities. The Council is administered jointly by both the Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. William A. Wulf are chairman and interim vice chairman, respectively, of the National Research Council.

N c. 09_0 NATIONAL KCA DE M I sii TR'ANSP'O RTATIO N1RES ERC HIBöD] NATIONRESEARCHJCÔ1IL - 2]IOiLCoNsTITuJIo4tvEN UEN'W WASH INGTONIDTC2O1I8 NON-PROFIT ORG. U.S. POSTAGE PAID WASHINGTON, D.C. PERMIT NO. 8970