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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Page 8

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4 1.1 Overview Establishing an appropriate contract time is an important step in the transportation project devel- opment process because contract time affects construction cost, construction quality, public incon- venience, economic impact in areas surrounding the construction project, and schedule risks. An accurate determination of contract time is also crucial to contract administration because it forms a basis for the awarded contractor to develop a baseline schedule. Thus, neither excessive contract time nor insufficient contract time is desirable for project stakeholders, including the transportation agency, the contractor, and the general public. Being able to develop credible estimates of contract time is vital to any transportation agency’s decision-making; risk management; and ability to develop, operate, and maintain the transpor- tation system for which it is responsible. In addition, state departments of transportation (DOTs) using federal funds are required by the FHWA to adopt a formal procedure for estimating construction project contract time (FHWA 2002). Contract time determination (CTD) is a challenging task, however: It requires not only deep understanding and knowledge of construc- tion activities but also consideration of various external and internal constraints, such as political commitment, funding expiration date, environmental restrictions, specification requirements, weather constraints, and community events. Most DOTs have some type of CTD process and/or manual encompassing general principles, spreadsheet-based tools, computerized tools, and statistics-based tools. Due to population growth and concentration in urban areas, a significant percentage of highway projects now occur in urban areas, which typically makes the projects more complex and schedule-driven. As a result, CTD for these urban projects is more complicated, requiring careful consideration of various stakeholders, neighboring projects and businesses, traffic maintenance during construction, and construction phasing plans. In addition, DOTs have implemented non-traditional contracting methods, such as A+B, incentives and disincentives, no-excuse bonus (NEB), design-build (DB), construction manager/general contractor (CMGC) or construction manager-at-risk (CMR), and public-private partnerships (P3). Those methods are generally considered alternative contracting methods (ACMs) based on the general body of knowledge and practice. The changing project characteristics and evolving contracting environment, along with the active utilization of advanced construction technologies and methods by the contracting commu- nities, require that DOTs revisit and modernize their existing CTD processes and methods more holistically and comprehensively. This guidebook meets this specific need by providing systematic guidance that DOTs can use to produce consistently credible, reliable, and defensible contract time estimates for their various types of highway projects. C H A P T E R   1 Introduction

Introduction 5   1.2 Guidebook Audience This guidebook is intended for transportation agency managers and contract time developers who want their agencies to use a systematic and consistent approach to construction CTD for transportation projects that are delivered by various contracting methods and techniques. These individuals may vary from agency to agency depending on the agencies’ organizational structure and business processes. For DOTs that are not yet using a systematic approach, this guidebook may provide a holistic implementation structure at the agency level. For DOTs that are using some structured processes and methods, this guidebook may provide ideas and specific methods and tools for improving some areas in their existing process. This guidance focuses on how-to resources and procedural steps for easier adaptation and faster implementa- tion at the practitioner level. 1.3 Guidebook Structure This guidebook is intended to facilitate the comprehensive analysis of various factors that may impact the CTD of a transportation project more effectively than current practices. To help improve the state of the practice and for rapid implementation of advanced approaches, the guide- book is structured to emphasize practical processes, methods, and tools. However, to be appli- cable to multiple agencies, the information has been presented in as generic and flexible a manner as possible so that it can be modified to fit each agency’s business practices and environment. This chapter provides an orientation to the guidebook structure and format. Chapter 2 pro- vides guidance on design-bid-build (DBB) projects. DBB is the most common and traditional project delivery type in the highway industry, and contract time developers typically gather project information at the end of the final design stage to determine the contract time of the project. In most DOTs, CTD in working days or calendar days is one of the final requirements for the plans, specifications, and estimate (PS&E) development and approval. This chapter of the guide- book provides a comprehensive and systematic procedural framework for determining contract time that occurs at the final design stage using generic methods and tools to accomplish the objectives of each step. Because most DOTs’ current CTD manuals focus on CTD issues for DBB projects, this chapter will be useful for DOTs seeking to improve and refine their current CTD manuals. Chapter 2 also serves as a backbone for the other chapters in the guidebook because many of the tools and methods covered in Chapter 2 are referenced in the content provided by later chapters. ACMs are defined inclusively, covering both alternative contracting techniques (ACTs), such as cost-plus-time and incentives/disincentives, and alternative project delivery methods (APDMs), such as DB and CMGC (FHWA 2020; Antoine, Alleman, and Molenaar 2019; Chini et al. 2018; Choi et al. 2020; Papajohn et al. 2020). In particular, ACTs focus on contractual techniques for construction acceleration (Khalafalla and Rueda 2020), while APDMs emphasize team communication and concurrency of fast-tracking projects (Khalafalla and Rueda 2020). Chapter 3 addresses challenging CTD issues that arise when a DBB project’s contract carries incentive and disincentive clauses as ACTs. Project schedule acceleration and/or cost savings are the major drivers for including such clauses, and most of those projects are typically located in urban and heavy traffic areas. Given that early completion is highly desirable for those projects, a careful cost and time trade-off analysis between the additional acceleration costs and the value of time saved by road users and the agency is necessary. Therefore, this chapter specifically provides guidance on addressing the impact of time on project costs and the related relationship as an integral part of the CTD process.

6 Systematic Approach for Determining Construction Contract Time: A Guidebook Most current DOTs’ CTD manuals do not include how contract time should be determined when a project is delivered through APDMs such as CMGC and DB projects. Because the use of APDMs is increasing across the nation, a need exists to provide proper guidance on CTD for APDMs. Gransberg and Senadheera (1999) reported that different DB team selection methods can result in different schedule incentives. Gransberg et al. (2008) found that 85 percent of respondents to a survey regarding the use of DB delivery favored it as a possible strategy to reduce schedule durations. APDMs typically seek to compress project delivery time by engaging contractors early in the project development, and this early involvement significantly influences project contract time. However, ACMs are implemented in various formats by DOTs due to their unique policies and regulatory requirements. Chapter 4 thus provides generic and flexible guidance on key CTD issues when a project is delivered with one of the APDMs. Chapter 5 provides guidance on risk identification and management of contract time. Owners’ interest in risk assessment approaches and methodologies has dramatically increased in the past decade, especially in capital transportation projects (Touran and Bakhshi 2010; Ashley, Diekmann, and Molenaar 2006; Allen and Touran 2005). This interest is particularly true for cost estimating and management due to the increasing amount of pressure on the accountability of public fund- ing. However, little or no guidance exists on contract time risk estimation and management. This chapter presents one of the first efforts to provide holistic guidance on how to systematically estimate and manage risks related to project scheduling and contract time for highway projects. FHWA (2014) recommends that DOTs periodically review internal procedures for deter- mining contract time and include a comparison of actual construction time against the original estimated contract time for completed projects to determine whether the applied procedures result in appropriate contract times. This essential element for creating a continuous improve- ment feedback loop is an integral part of contract time estimating processes. Recently published, NCHRP Synthesis 502: Practices for Establishing Contract Completion Dates for Highway Projects found increased feedback and communication between agency divisions to be the most impor- tant area for improvement in current time determination procedures (Taylor, Sturgill, and Li 2017). Chapter 6 provides agency-level guidance on processes, methods, and tools for evaluating post-construction contract time, capturing lessons learned (LLs), and creating a feedback loop for continuous improvement of CTD processes. Following Chapter 6, the guidebook provides a list of abbreviations and a glossary to facilitate the clear understanding of each of the technical terms that have been used throughout. Appen- dices provide descriptions of many different CTD methods and tools. The spreadsheet-based CTD4HP Toolkit, a user’s manual for the toolkit, and a document with suggestions for agencies implementing the use of these procedures are all available as supplemental files that can be down- loaded at no charge from the NCHRP Research Report 979 webpage at www.trb.org. This guidebook identifies 24 methods and tools to help DOTs quickly implement advanced practices and methods for CTD. Each method/tool’s description addresses five parameters: • What is it? • When to use it? • Why use it? • What does it do? • How to use it? Some descriptions also provide additional guidance and tips. This simple but structured description for each method/tool will help DOTs accurately apply the method/tool at the right time for the correct purpose. The method/tool descriptions in the appendices also can serve as an excellent communication resource among contract time

Introduction 7   developers and as an education and training resource for organizational-level knowledge and competency enhancement programs related to project scheduling, CTD, and administration. e spreadsheet-based CTD4HP Toolkit is a one-stop shop for a contract time developer. It includes all tools and reference resources that are aligned with the procedural steps dened in this guidebook for each topic. e user’s manual for the toolkit instructs users on how to quickly learn to use the toolkit. 1.4 Guidebook Format Guidebooks should be easy to understand and use for busy transportation professionals. A consistent and visual format throughout the guidebook helps users to quickly nd the infor- mation and knowledge they need and apply it to a relevant problem. Each topic begins with a description of key concepts to familiarize users with the overall guide content. Given the dier- ences among states agencies and among districts or regions in large states where the agency is decentralized, the procedural guidance is exible and generic for adjustment and modication. For each topic, this guidebook also uses graphical elements to provide eye-catching notations and a step-by-step procedure. As seen in Figure 1-1, a vertically arranged step-by-step procedure provides specic guidance about the context and order of each step. Figure 1-1 also shows how, when the execution of a step requires a series of sub-steps, a two-tiered format is used to present the sub-steps. For each procedure, a separate gure uses graphical notations (described in Table 1-1) to highlight guidance on the necessary input data and information, the expected out- come of the step or sub-step, the methods and tools available, the pros and cons associated with the step or sub-step, and any emerging technology that may help with the step or sub-step. List factors that dictate contract time Identify relevant documents and stakeholders Identify time constraints for each factor Figure 1-1. Example of visual step-by-step procedure highlighting a step and its sub-steps.

8 Systematic Approach for Determining Construction Contract Time: A Guidebook 1.5 References Allen, J., and A. Touran (2005). “Risk Analysis in Transit Projects.” Proceedings, 49th Annual Meeting of AACE International, New Orleans, LA. Antoine, A. L., D. Alleman, and K. R. Molenaar (2019). “Examination of project duration, project intensity, and timing of cost certainty in highway project delivery methods.” Journal of Management in Engineering, 35(1), 04018049. Ashley, D. B., J. E. Diekmann, and K. R. Molenaar (2006). Guide to Risk Assessment and Allocation for Highway Construction Management. Federal Highway Administration, Washington, D.C. Chini, A., L. Ptschelinzew, R. E. Minchin Jr., Y. Zhang, and D. Shah (2018). “Industry attitudes toward alternative contracting for highway construction in Florida.” Journal of Management in Engineering, 34(2), 04017055. Choi, K., I. Jung, Y. Yin, C. Gurganus, and H. D. Jeong (2020). “Holistic performance evaluation of highway design-build projects.” Journal of Management in Engineering, 36(4), 04020024. FHWA (2002). FHWA Guide for Construction Contract Time Determination Procedures. Federal Highway Admin- istration, Washington, D.C. Available at: https://www.wa.dot.gov/construction/contracts/t508015.cfm. FHWA (2014). Contract Administration Core Curriculum Manual. FHWA-NHI-134077. Federal Highway Adminis- tration, Washington, D.C. FHWA (2020). “Innovative Contracting Solutions: Alternative Contracting Methods.” Available at: https://www. wa.dot.gov/resourcecenter/teams/construction/cpm_6ics.pdf. Gransberg, D. D., J. N. Datin, and K. R. Molenaar (2008). NCHRP Synthesis 376: Quality Assurance in Design- Build Projects. Transportation Research Board of the National Academies, Washington, D.C. Gransberg, D., and S. Senadheera (1999). “Design-build contract award methods for transportation projects.” Journal of Transportation Engineering, 125(6), 565–567. Khalafalla, M., and J. A. Rueda (2020). “Methodology to assess the impact of lump-sum compensation provisions on project schedules.” Journal of Management in Engineering, 36(4), 04020028. Papajohn, D., M. El Asmar, K. R. Molenaar, and D. Alleman (2020). “Comparing contract administration func- tions for alternative and traditional delivery of highway projects.” Journal of Management in Engineering, 36(1), 04019038. Taylor, T. R. B., R. E. Sturgill, Jr., and Y. Li (2017). NCHRP Synthesis 502: Practices for Establishing Contract Completion Dates for Highway Projects. Transportation Research Board, Washington, D.C. Touran, A., and P. Bakhshi (2010). “Eect of escalation on large construction programs,” AACE Transactions, Atlanta, GA. Visual Notation Description The required documents and information are described for the step or sub-step. The expected outcome of the step/sub-step is described. The available methods and tools that can be used in the step/sub-step are described. The pros and cons associated with the step/sub-step are described. The emerging technology that may help with the step/sub-step is described. Additional guidance and tips (provided with some steps). Table 1-1. Standard visual notations used in the guidebook.

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Contract time affects the cost of construction, traffic disruption and public inconvenience, the economic impact of projects to the surrounding areas, and schedule risks.

The TRB National Cooperative Highway Research Program's NCHRP Research Report 979: Systematic Approach for Determining Construction Contract Time: A Guidebook provides state departments of transportation guidance for producing consistently credible, reliable, and defensible contract time estimates.

Supplemental to the report is NCHRP Web-Only Document 298: Developing a Systematic Approach for Determining Construction Contract Time, a spreadsheet-based Toolkit, a Technical Memorandum, and a Presentation.

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