Quality-Related Pay Adjustment Factors for Pavements (2012)

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NAtioNAl CooperAtive HigHwAy reseArCH progrAm Responsible Senior Program Officer: Amir N. Hanna January 2013 QUALITY-RELATED PAY ADJUSTMENT FACTORS FOR PAVEMENTS This digest summarizes the findings from NCHRP Project 10-79, “Guidelines for Quality-Related Pay Adjustment Factors for Pavements.” It was prepared by Amir N. Hanna, NCHRP Senior Program Officer, from the contractor’s final report authored by Charles S. Hughes, James S. Moulthrop, and Shiraz Tayabji of Fugro Consultants, Inc., Austin, Texas; Richard M. Weed, Trenton, New Jersey; and James L. Burati, Clemson University, South Carolina. Charles S. Hughes served as principal investigator. Research Results Digest 371 INTRODUCTION This digest summarizes the findings of the research conducted under NCHRP Project 10-79 to develop guidance pertain- ing to the quality-related pay adjustment factors used for flexible and rigid pave- ment construction. Highway agencies generally specify certain quality measures for the accep- tance of pavement construction. However, because many factors influence construc- tion operations, characteristics of the con- structed pavement (e.g., material properties and smoothness) will generally vary some- what from those specified. Such variance will affect pavement quality and perfor- mance and, therefore, will affect the high- way agency and road users. To account for the value lost or gained by the variance from the specified values, many highway agencies incorporate quality-related pay adjustments in the form of incentives and disincentives in the construction contracts of flexible and rigid pavements. Many of the approaches used by high- way agencies for dealing with construction variance and assigning pay adjustment fac- tors have been developed empirically and with limited consideration of the actual effect on performance. In addition, these approaches use procedures for determining the amount and method of pay adjustment that do not consider some relevant issues, such as highway functional classification, constructability, impacts on the highway users, and contractor/agency risk sharing. There has been a need to enhance these approaches and develop rational guidance on the issues associated with determining quality-related pay adjustment factors for flexible and rigid pavements. This guidance will help highway agencies incorporate pay adjustment factors that realistically reflect the expected gain or loss in pavement per- formance into construction contracts. RESEARCH APPROACH NCHRP Project 10-79 was conducted to evaluate the approaches used for assign- ing pay adjustment factors for flexible and rigid pavement construction and to pro- pose enhancements to the most promising approaches. To accomplish this objective, the research included a review of informa- tion relevant to quality-related pay adjust- ment factors and a survey of state highway agencies to identify the different processes used for determining quality-related pay adjustment factors. The research then eval- uated these processes and identified those processes that merit further consideration

2•• Many agencies use weighted composite pay factor equations, although the weights and AQCs vary considerably. The responses to the questionnaire revealed the following practices for flexible pavements: •• The stepped (tabular) and continuous (equa- tion) forms of pay adjustment factors are being used equally but with appreciable variations among agencies. •• Smoothness (as a measure of ride quality) is con- sidered separately from materials/ construction AQCs by most agencies. •• Percent Within Limits (PWL) is the single most often used quality measure except for smooth- ness where quality is measured by the average value. •• Most agencies use maximum incentives, ranging from 1% to 15%; the most commonly used maximum incentive is 5% (15% is used only for smoothness). •• Most agencies have maximum disincentives; many agencies use a remove-and-replace pro- vision, but only a few agencies use a shutdown provision. Different triggers are used for apply- ing a combination of a maximum disincentive, a shutdown provision, and/or a remove-and- replace clause. •• A majority of agencies pay incentives for supe- rior quality levels of the various AQCs, but some agencies allow use of incentives only to offset disincentives. •• Two agencies use different weights and AQCs for different highway classification. The responses to the questionnaire revealed the following practices for rigid pavements: •• Strength, thickness, and smoothness are the three most often used AQCs, but little consen- sus exists among agencies about how these AQCs and others are used. •• The stepped form of pay adjustments is used more often than the continuous form. •• Little consensus exists among agencies regard- ing how to combine individual pay adjustment factors. •• Only one agency reported use of a composite weighted pay adjustment equation. •• PWL and the average are the most often used quality measures. and use as a basis for developing rational guidance relevant to quality-related pay adjustment factors. Finally, the research proposed specific approaches for assigning quality-related pay adjustment factors as well as specific items for consideration in pave- ment construction contracts. Literature Review The literature review revealed investigations conducted in the 1970s to develop rational pay adjustment factors (Willenbrock and Kopac 1977) with enhancements some 15 years later (Afferton et al. 1992). Research performed in subsequent years identified the following items as necessary for developing highway construction payment relation- ships (Burati et al. 2003): •• Identifying the specific acceptance quality characteristics (AQCs) that are most closely associated with the performance of the fin- ished product. •• Establishing acceptable quality levels (AQLs) for each of the characteristics that are closely related to performance (i.e., the required level to produce the desired performance). •• Ensuring the ability of the construction indus- try to meet the desired acceptance require- ments without a need for extraordinary quality control procedures. •• Ensuring availability of valid and reliable sampling and testing methods and procedures to accurately determine the quality of the fin- ished product. •• Developing a pay schedule for assessing incen- tives and disincentives that is reasonably com- mensurate with the expected gain or loss in performance. Survey of Highway Agencies A survey questionnaire concerning pay adjust- ment schedule practices was forwarded to all state highway agencies. The responses received from 37 agencies revealed the following observations: •• Pay adjustment factors are further developed and more often used for flexible pavements than for rigid pavements. •• The AQCs for flexible pavements vary appre- ciably among highway agencies but to a lesser extent for rigid pavements.

3•• A majority of agencies pay incentives for superior quality pavement; very few agencies use incentives only to offset disincentives. •• Most agencies use maximum incentives, ranging from 3% to 15%; the most commonly used maximum incentive is 5% (15% is used only for smoothness). •• Many agencies have maximum disincentives or use a remove-and-replace provision, but very few agencies use a shutdown provision. Quality-Related Pay Adjustment Factor Methods The literature review and survey identified the available methods for determining quality-related pay adjustment factors. These methods can be cate- gorized based on the quality-adjustment factor rela- tionship as (a) engineering-based, (b) empirical, or (c) experience-based methods. Engineering-Based (Complex) Methods These methods are complex, incorporate propri- etary analytical models, and use software to perform the necessary analysis. They use the fundamental engineering properties as a means for predicting pavement performance, and the software incorpo- rates means for identifying the appropriate AQCs and their relationship to these properties. These methods have been developed using engi- neering and mathematical principles. Typically, they include performance relationships based on mecha- nistic or pavement design theory and use established cost-evaluation procedures such as life cycle cost (LCC) analysis. These methods conform to the defi- nitions of performance-related specifications (PRS) provided in AASHTO R 10: Standard Practice for Definition of Terms Related to Quality and Statis- tics as Used in Highway Construction (AASHTO R10). These methods have the potential for provid- ing accurate relationships but they tend to be com- plex and not easy to implement. Examples of these methods are the following: •• The PaveSpec software developed for rigid pavements under research for FHWA (Hoerner et al. 2000). This procedure requires over 100 user inputs to obtain the results. •• The HMA Spec software developed for flex- ible pavements under NCHRP Project 9-20 (Epps et al. 2002, Hand et al. 2004). About 100 user inputs are required to obtain results from this procedure. •• The Quality-Related Specification Software (QRSS) resulted from the evaluation of HMA Spec software conducted under NCHRP Proj- ect 9-22 (Fugro Consultants, Inc. and Arizona State University 2011). This software incor- porates the performance prediction models of the Mechanistic-Empirical Pavement Design Guide (MEPDG). Empirical Methods Empirical methods generally use the same engineering and mathematical principles as the engineering-based methods. They use empirical rela- tionships derived from highway agency experience and not from engineering principles. Some of these methods conform to the definitions of PRS provided in AASHTO R 10. Such methods were developed for flexible pavements (Weed 2006) and for rigid pavements (Weed 1999). These methods are simpler and easier to implement than the engineering-based methods, but they are likely to be less precise. Experience-Based Methods Experience-based methods usually are not derived from either engineering or mathematical principles and do not consider predicting pavement perfor- mance. These methods compute pay factors based on an approach that reflects the perceived man- ner and extent to which the AQCs influence pave- ment performance. These methods are generally compatible with AASHTO R 9: Standard Practice for Acceptance Sampling Plans for Highway Construc- tion (AASHTO R 9) and AASHTO R 42: Standard Practice for Developing a Quality Assurance Plan for Hot-Mix Asphalt (AASHTO R 42). Evaluation of Quality-Related Pay Adjustment Factor Methods The PaveSpec, HMA Spec, and QRSS software products incorporate complex analytical approaches that require a large number of input variables. Because errors are likely to be associated with these inputs, the resulting output will also exhibit some error—the extent of which will depend on the extent of error in each input variable and the likeli- hood of a compounding effect. For these reasons, none of these methods was considered a potential

4candidate for enhancement and adoption as a rec- ommended practice. The empirical method for rigid pavements has not been sufficiently developed to warrant further consideration as a potential candidate for enhance- ment and adoption as a recommended practice. Available procedures were evaluated with consid- eration to accuracy, complexity, ease of implementa- tion, and relevance to AASHTO R 9, AASHTO R 10, and AASHTO R 42. This evaluation revealed that the procedure contained in AASHTO R 9 is appropriate for enhancement and development of two practices, potentially titled (1) Recommended Practice for Flex- ible Pavements and (2) Recommended Practice for Rigid Pavements. The framework for performance- related specifications (Weed 1999) also can be enhanced to provide a more effective process for flexible pave- ments (potentially titled Empirical PRS Method for Flexible Pavements). A brief description of each of these three procedures is provided. Recommended Practice for Flexible Pavements This procedure uses statistically valid methods but does not stipulate the specific AQCs that should be used or the weights that should to be assigned to them. The procedure is based on experience and does not include a model or pay schedules supported by economic analysis; it uses engineering judg- ment combined with experience to develop quality- related pay factor adjustments. Recommended Practice for Rigid Pavements This procedure is similar to that for flexible pave- ments but contains different details. Although AQCs and quality measures are different, the procedure (similar to the flexible pavement procedure) uses statistically valid methods and does not stipulate the specific AQCs that should be used or the weights that should be assigned to them. It is also based on experi- ence and does not include a model or pay schedules supported by economic analysis, and uses engineer- ing judgment combined with experience to develop quality-related pay factor adjustments. Empirical PRS Method for Flexible Pavements This method—called the “expected-life” method in the user’s manual for FHWA’s SpecRisk specifica- tion analysis software—bases payment on the expected performance (service life) of the as- constructed pave- ment (SpecRisk User’s Manual 2008). Because load- bearing capacity is strongly related to expected service life and resultant economic value, this method would provide rational basis for effective adjusted-payment schedules. SUMMARY OF FINDINGS AND RECOMMENDATIONS Findings Since the 1980s, considerable progress has been made toward developing quality-related pay adjust- ment factors, with even greater progress made in recent years. Several important decisions need to be made concerning these factors. It is essential that payment relationships be reasonable, achievable, and viewed as being fair to both the contractor and the highway agency. The following findings and conclusions are derived from this study: •• Quality-related pay adjustment factors for pavements are used extensively in the United States and Canada but are not used in Europe, South America, New Zealand, or Australia. These procedures continue to evolve and have gained widespread acceptance in highway construction. •• The quality-related pay adjustment factors in use vary in the AQCs that are used and the manner and magnitude in which they are applied. Many agency specifications do not define either AQL or rejectable quality level (RQL). However, AQL is used more often than RQL. •• When considering AQL, the level of quality required to achieve the desired performance needs to be defined and described in the speci- fications, and the pay schedule needs to reflect an average of 100 percent when that level of quality is delivered. •• RQL provisions can enhance the highway agency’s protection against acceptance of defi- cient quality. However, the provision of requir- ing removal and replacement at the contractor’s expense needs to ensure that the level selected as the RQL warrants such consequences. For example, a retest provision to confirm deficient quality before enforcing a remove-and-replace provision may be included. •• PWL is the most used quality measure. •• Composite pay factors are used by many high- way agencies.

5•• Specifications typically include ride quality (smoothness) as a separate AQC from other material and construction AQCs, but it can be included with other AQCs if desired. •• Incentive and disincentive pay adjustment factors are commonly included in state high- way agency acceptance plans. •• Procedures with different levels of complex- ity are used for quality-related pay adjustment factors. These procedures include (1) com- plex engineering-based methods that often incorporate proprietary analysis techniques; (2) less complex empirical methods that use engineering and mathematical principles but are more tailored to local data and experience; and (3) intuitive methods that rely on per- ceived AQC-performance relationships not derived from either engineering or mathemati- cal principles but have been used successfully for many years. The latter procedures appear to be the most adaptable for developing the least complex and easy-to-implement quality- related procedures. •• Continuous (equation-type) pay schedules are preferred because they have more desirable features than stepped pay schedules. •• Limited information is available on the con- sideration of functional classification in quality-related pay adjustment factors. Recommendations Several findings derived from this research can help highway agencies enhance their processes for quality-related pay adjustment factors. Based on these findings, the following actions are suggested: •• Use the PWL approach. •• Use only those AQCs that are considered to be best related to performance and only those nec- essary for defining the desired product. AQCs that are often used for flexible pavement mate- rials are asphalt content, lab-compacted air voids, voids in the mineral aggregate, and two sieve sizes. AQCs for the constructed flexible pavement are density, thickness, and smooth- ness. AQCs for rigid pavements are compres- sive strength, thickness, and ride quality. •• Use both AQL and RQL values. The AQL may be set at PWL = 90 for flexible and rigid pave- ments (AASHTO R 9, 2008) but RQL value should be established by the agency based on a risk analysis. •• Conduct a risk analysis of the acceptance plan before implementing it. The software, titled “Analysis of Risks in Percent Within Limits and Percent Defective Acceptance Plans and Specifications, SpecRisk Version 2.4” (Office of Infrastructure Research and Development 2008), is an appropriate tool for this analysis. •• Consider including an incentive provision in the specification to compensate the contractor when producing product at the AQL. •• If functional class is to be considered, use quality-related pay adjustment factors for Inter- states, principal urban and rural arterials, and major collectors but use method specifications for rural secondary roads, ramps, and facilities with geometric issues and uncommon features. FINAL REPORT The contract agency’s final report, “Guidelines for Quality-Related Pay Adjustment factors for Highway Pavements,” gives a detailed account of the project, findings, and conclusions and includes further information on current practices regard- ing quality-related adjustment factors. The report is available online at www.trb.org by searching “NCHRP10-79_FR.pdf”. ACKNOWLEDGMENTS The work presented herein was performed under NCHRP Project 10-79 and was guided by NCHRP Project Panel D10-79, chaired by Mr. David L. Lippert, Illinois Department of Transportation, with members Mr. Richard L. Bradbury, Maine Department of Transportation; Dr. Judith B. Corley- Lay, North Carolina Department of Transportation; Dr. Phillip Dunston, Purdue University; Mr. Kent Hansen, National Asphalt Pavement Association; Mr. James R. Spaid, Washington State Department of Transportation (retired); and Mr. Gerald F. Voigt, American Concrete Pavement Association. Mr. Mark Swanlund provided liaison with the Federal Highway Administration. The final report was prepared by Mr. Charles S. Hughes, Mr. James S. Moulthrop, and Dr. Shiraz Tayabji of Fugro Consultants, Inc.; Mr. Richard M. Weed, a consultant; and Dr. James L. Burati of Clemson University.

6REFERENCES AASHTO Standard Practice R 9. Standard Practice for Acceptance Sampling Plans for Highway Construc- tion. American Association of State Highway and Transportation Officials, Washington, D.C., 2005. AASHTO Standard Practice R 10. Standard Practice for Definition of Terms Related to Quality and Statistics As Used in Highway Construction. American Asso- ciation of State Highway and Transportation Offi- cials, Washington, D.C., 2006. AASHTO Standard Practice R 42. Standard Practice for Developing a Quality Assurance Plan for Hot- Mix Asphalt (HMA). American Association of State Highway and Transportation Officials, Washington, D.C., 2006. Afferton, K.C., J. Freidenrich, and R.M. Weed. Managing Quality: Time for a National Policy. In Transporta- tion Research Record: Journal of the Transportation Research Board, No. 1340, Transportation Research Board of the National Academies, Washington, D.C., 1995, pp. 3–39. Burati, J.L. et al. Optimal Procedures for Quality Assur- ance Specifications. Office of Research, Develop- ment, and Technology, Report FHWA-RD-02-095, FHWA McLean, VA, June 2003, 347pp. Epps, J.A. et al. NCHRP Report 455: Recommended Performance-Related Specification for Hot-Mix Asphalt Construction: Results of WesTrack Proj- ect. Transportation Research Board of the National Academies, Washington, D.C., 2002. Fugro Consultants Inc. and Arizona State Univer- sity. NCHRP Report 704: A Performance-Related Specification for Hot-Mixed Asphalt. Transporta- tion Research Board of the National Academies, Washington, D.C., 2011. Hand, A.J. et al. Evaluating Field Performance: Case Study Including Hot Mix Asphalt Performance- Related Specifications. In Journal of Transportation Engineering, Vol. 130, No. 2. ASCE, April 2004, pp. 251–260. Hoerner, T.E. et al. Improved Prediction Models for PCC Pavement Performance-Related Specifications, Volume II: Pave Spec 3.0 User’s Guide. FHWA Pub- lication No. FHWA-RD-00-131, September 2000. Hoerner, T.E., and M.I. Darter, Improved Prediction Models for PCC Pavement Performance-Related Specifications, Volume I: Final Report. FHWA Pub- lication No. FHWA-RD-00-130, September 2000. Office of Infrastructure Research and Development. Analysis of Risks in Percent Within Limits and Percent Defective Acceptance Plans and Specifi- cations, SpecRisk User’s Manual Version 2.4. Fed- eral Highway Administration, McLean, Virginia, July 2008. Weed, R.M. Practical Framework for Performance- Related Specifications. In Transportation Research Record: Journal of the Transportation Research Board, No. 1654, TRB, National Research Council, Washington, D.C., 1999, pp. 81–87. Willenbrock, J.H., and P.A. Kopac. Development of Price-Adjustment Systems for Statistically Based Highway Construction Specifications. In Transpor- tation Research Record 652, TRB, National Research Council, Washington, D.C., 1977, pp. 52–58.

Transportation Research Board 500 Fifth Street, NW Washington, DC 20001 These digests are issued in order to increase awareness of research results emanating from projects in the Cooperative Research Programs (CRP). Persons wanting to pursue the project subject matter in greater depth should contact the CRP Staff, Transportation Research Board of the National Academies, 500 Fifth Street, NW, Washington, DC 20001. COPYRIGHT InfORmaTIOn Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. Subscriber Categories: Materials • Pavements ISBN 978-0-309-25881-4 9 780309 258814 9 0 0 0 0