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Systematic Approach for Determining Construction Contract Time: A Guidebook (2022)

Chapter: Chapter 3 - CTD Guide for Urban Projects with Incentive Provisions

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Suggested Citation:"Chapter 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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 3 - CTD Guide for Urban Projects with Incentive Provisions." 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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39   e acceleration of highway construction is more critical today than it was in the past for state DOTs because of the continuously growing number of construction projects in urban areas driven by urbanization and the rapid population growth. According to the FHWA, about 35 percent of U.S. highway construction projects are undertaken in urban areas (Choi et al. 2016). ese urban projects seriously disrupt trac in communities that use aected road- ways, resulting in major inconveniences to the traveling public and commercial enterprises. us, strong motivation exists for DOTs to accelerate construction to ameliorate its negative impact on the public, especially for projects located in urban areas where the trac volume is high and the aected population is large (Choi et al. 2010, Lee et al. 2008, Napolitan and Zegras 2008). To mitigate this trac disruption during construction, DOTs have adopted several innova- tive ACTs that oer the potential to accelerate construction and thus reduce trac disruption and other negative consequences of longer construction time. e benets of using ACTs are well known and vigorously advocated. However, an inaccurately determined contract time can reduce the eectiveness of these innovative ACTs signicantly. Various reasons for this relation- ship have been noted by the FHWA, by state DOTs, and in published research. For example, Zhai et al. (2016) observed the following: • Trac volumes on most highways are signicantly greater and continue to increase, creating a greater impact on motorists’ safety and mobility; • Keeping construction time short on heavily traveled roads is important to minimize trac inconvenience to the aected communities and business enterprises; • Given the signicant economic impacts, the FHWA recently launched the Every Day Counts initiative to emphasize the importance of on-time project delivery; and • Reliable estimates of contract time allow for optimization of construction engineering costs and other resources. Urban projects post uniquely critical challenges to state DOTs because of their high com- plexity, trac volume, and level of uncertainty. An appropriately determined contract time, combined with innovative contracting techniques, can accelerate project schedule, reduce trac impact, and minimize claims and disputes over project delay. For most urban projects, the cost of the project is usually a secondary concern when com- pared to the urgency of early completion and reduction of public inconveniences. CTD for urban projects is heavily driven by external factors instead of being solely based on estimates of construction duration. Tool T2.4 provides the entire list of inuential factors and addresses how to eectively review and evaluate them (see Appendix A and the CTD4HP Toolkit). Among the listed factors, the two that are most consistently signicant for urban projects are (1) main- tenance of trac (MOT), and (2) urgency of completion. C H A P T E R   3 CTD Guide for Urban Projects with Incentive Provisions

40 Systematic Approach for Determining Construction Contract Time: A Guidebook Optimized trac management plans will help reduce the construction time, and the use of some form of incentives/disincentives (e.g., A+B+I/D, NEB, and lane rental [LR] approaches) as alternative contracting techniques will help accelerate construction time. In evaluating trac management plans, a thorough impact analysis of time and cost—such as trac delay estima- tion and road user cost estimation due to diering trac scenarios—is required to determine the base contract time for applying any ACT to the project. Given the unique characteristics of urban projects, transportation agencies need to use a variety of approaches to determine the appropriate contract time rather than the generic procedure used for traditional DBB projects. However, according to the interview results shown in Figure 3-1, most state DOTs do not dierentiate urban projects for purposes of CTD, and only a few state DOTs conduct formal time–road user cost trade-o analyses, even though the majority of state DOTs that participated in the research interview acknowledged that the inuential factors for urban CTD are signicantly dierent. e FHWA has advocated for a systematic approach for CTD for decades (FHWA 2002), but many state DOTs rely heavily on the personal experiences of DOT engineers when determining contract time for urban complex projects (Anderson and Damnjanovic 2008). Nonetheless, more than half the DOTs that participated in the interviews for this research reported that they have implemented ACTs in their projects. is chapter’s guide on CTD for urban projects using incentives is intended to help DOTs adopt a more systematic approach. 3.1 Characteristics of ACTs is guidebook covers the following common ACTs used by DOTs. 3.1.1 A+B A+B, or cost-plus-time bidding, involves time, with an associated cost, in the low-bid determi- nation. Under the A+B method, each bid submitted consists of two components: 1. e “A” component is the traditional bid for the contract items and is the dollar amount for all work to be performed under the contract; and Are influential factors for urban CTD different? Use significantly different approach for urban CTD? Conduct format time-cost trade off analysis? Implement ACTs Yes No Yes No Yes No Yes No Figure 3-1. Current practices for urban project CTD.

CTD Guide for Urban Projects with Incentive Provisions 41   2. The “B” component is a bid for the total number of calendar days required to complete the project, as estimated by the bidder. (Calendar days are used to avoid any potential for contro- versy that may arise if workdays are used.) 3.1.2 Incentives/Disincentives To incentivize contractors, incentive/disincentive (I/D) provisions use monetary awards to accelerate the project paired with monetary penalties to discourage the contractors from delaying the project. Over the course of the contract, the incentives and disincentives are assessed on a daily basis and are established by the agency based on the estimated road user cost (RUC) and other costs incurred from prolonged construction. 3.1.3 A+B+I/D I/D provisions can be used to supplement A+B bidding, and the use of I/D provisions can offset some of the disadvantages of the A+B approach. Because I/D provisions can motivate contractors to meet schedules (Choi et al. 2011), A+B bidding with I/D provisions has become one of the most widely used ACTs for shortening construction time, especially for time-critical projects. Generally, A+B combined with I/D provisions is known to increase costs for both agencies and contractors; however, agencies benefit from construction time saved for road users, and the contractors benefit from incentive bonuses. CTD for this A+B+I/D best-value procurement contracting technique has continued to rely to a great extent on the experience and judgment of the contracting agency engineers tasked with estimating the project duration, RUCs, and realistic I/D rates (Choi et al. 2016). 3.1.4 No-Excuse Bonus The no-excuse bonus (NEB) provision offers contractors a substantial bonus if the contractor can complete the project or reach a project milestone by a calendar date predetermined by the agency. The “no excuse” provision means that no time extensions are awarded for unforeseen conditions or inclement weather, except for catastrophic events or reasons directly attributed to the agency. This contracting technique is intended to encourage contractors to complete the project before any critical calendar date (i.e., a date after which the agency anticipates that traffic might be severely impacted, or a date after which catastrophic inconveniences are likely to occur if the project has not been finished). 3.1.5 Lane Rental Lane rental (LR) provisions add a rental fee as a disincentive to contractors. LR fees are intended to minimize road user impacts. The fee is assessed based on the sum of time that each lane is obstructed or closed due to the construction. During the bidding process, the contractor determines the number of lane closures required to complete the work and includes this lane closure plan in the bid proposal. The unit LR amount should be estimated by the state DOT based on daily or hourly RUCs—which can vary by time of day (e.g., daytime or nighttime) or by the day of the week (e.g., weekday or weekend), reflecting the fluctuation of the traffic demands. Using special provisions, the agency also can set a maximum allowable number of lane closures to provide an upper limit on the traffic impact to the public. Table 3-1 and Table 3-2 summarize the characteristics of the major ACTs available for urban projects. In this guidebook, Appendix B provides more thorough descriptions of the ACTs that were introduced in this section, along with detailed explanations of how each ACT works, its intended use for highway projects, its strengths and limitations, and best-use scenarios.

42 Systematic Approach for Determining Construction Contract Time: A Guidebook Table 3-1. Summary of the characteristics of major ACTs for urban projects (Part 1). 3.2 Generic CTD Procedure for Urban Projects is section provides guidance on a state-of-the-art, systematic, stepwise procedure for deter- mining the most eective and economical ACTs for use with time-sensitive projects that are typically urban. Figure 3-2 shows the generic CTD procedure for time-sensitive urban projects. e eight-step procedure represents the best-practice approach for a systematic procedure to determine con- tract time for urban projects with incentives and is divided into two tiers (Tier I for the primary steps and Tier II for the sub-steps). us, the guidelines described for Tier I are the overall procedures (steps) of CTD for urban projects. Each Tier I step is further divided into Tier II (sub-step) activities that describe the processes and procedures taken to meet the objectives of the major activities in Tier I. The systematic procedure begins with the evaluation and determination of the appro- priate ACT or ACTs based on the project’s characteristics and scopes. This step is followed

CTD Guide for Urban Projects with Incentive Provisions 43   Table 3-2. Summary of the characteristics of major ACTs for urban projects (Part 2). by the exploration and determination of potential “What-if?” construction and trac man- agement scenarios. Then, the effect of each “What-if?” scenario on project duration is esti- mated. In the subsequent step, the mobility impact for each of the alternatives is assessed based on the estimated number of working days. Estimated daily road user cost (DRUC) and work zone delays are yielded by this step. Finally, for the selected final alternative (ACT or ACTs), the estimated initial duration is reevaluated and adjusted. The adjusted number of working days is then converted into a calendar that accounts for weather, holidays, and weekends. By following this procedure, the agency can arrive at the maximum time allowed to complete the entire contract. e estimated value of DRUC is incorporated into the I/D values. Further, the determined contract time serves as the baseline of I/D rates (i.e., daily I/D rate, closure I/D rate, incentive cap rate), with the expectation that contractors will bid a reasonably shorter duration while also ensuring that they receive the right amount of compensation in exchange for committing additional resources to accelerate construction.

44 Systematic Approach for Determining Construction Contract Time: A Guidebook AADT = annual average daily traffic. Figure 3-2. Systematic procedure for determining contract time for urban projects with incentives.

CTD Guide for Urban Projects with Incentive Provisions 45   The steps of this procedure are presented in greater detail in the following sections. 3.2.1 Step 1—Determine the Appropriate ACT With regard to project type, size, complexity, and urgency of accelerated construction, deter- mine the appropriate ACTs. 3.2.2 Step 2—Identify “What if?” Scenarios Alternative ACTs should be examined with respect to the possible duration and occurrence of various construction and traffic management scenarios (i.e., single-lane, double-lane, or full-lane closures occurring at different times of the day or night, on weekdays, on weekends, or even 24/7). 3.2.3 Step 3—Estimate Project Duration In the advanced planning stage (from the schematic to design document scoping phases), traffic assessments for each alternative should begin with an estimate of the number of workdays needed for the traffic management options being considered because the estimated number of workdays is needed to serve as the baseline for conducting mobility impact assessments. 3.2.4 Step 4—Assess Mobility Impact For each alternative, the assessment should include estimates of the RUC and mobility impacts (e.g., delayed time due to lane closure options). Mobility impact assessments should be performed in close relation to the project duration estimates. 3.2.5 Step 5—Select the Most Feasible Option After accounting for prioritized values and/or trade-offs with regards to project duration, cost, and the amount of traffic disruption for each of the alternatives considered, the agency can select the most feasible and economical option (ACT) for the given project. 3.2.6 Step 6—Determine Risk Level The ACT may increase the frequency and magnitude of contract change orders, resulting in substantial delays in contract time. Therefore, once the most feasible ACT has been selected (in Step 5), it is crucial to identify any potential risks associated with third-party conflicts (e.g., scope of the project, design uncertainties, rights of way [ROWs], utilities, and so forth). 3.2.7 Step 7—Adjust Project Duration in Step 3 An accelerated production rate is applied to the selected ACT with an expectation that the I/D project will use 15 to 20 percent more resources than a conventional schedule. The initially estimated project duration (determined in Step 3) is adjusted accordingly to be incorporated into the B value in the A+B bidding. 3.2.8 Step 8—Maximum Time Allowed To calculate the maximum time allowed for the contract, the project duration in working days for the selected final alternative needs to be converted to calendar days and account for non-working days such as weather, holidays, and weekends.

46 Systematic Approach for Determining Construction Contract Time: A Guidebook 3.3 CTD Procedure for Urban Projects— Steps and Sub-Steps 3.3.1 Step 1—Determine the Appropriate ACTs e rst step in determining the contract time of an urban project is to determine the ACT that will be best suited for the purpose and characteristics of the project. Figure 3-3 presents the three sub-steps that are considered the best procedure to determine the most appropriate ACT with respect to the project type, size, complexity, and urgency of completion. Identify project scenario Review project attributes Determine the most appropriate ACTs Sub-Step 1—Identify project scenario. Identify the project characteristics with respect to the traffic volume, detour route, commuter route, network level impacts, socioeconomical sensitivity, political commitments, adjacent businesses and communities, and safety for construction workers and motorists to determine the construction acceleration need. Sub-Step 2—Review project attributes. Review and examine project scoping and design documents, as well as the project’s purpose and needs statement to identify and list project attributes with respect to project type, size, complexity, level of innovation, and critical milestones. Sub-Step 3—Determine the most appropriate ACTs. Based on the considerations listed in Table 3-1 and Table 3-2, thoroughly evaluate each ACT’s strengths and weakness in relation to the identified project attributes and urgency of completion. Then, select the most appropriate ACT (or ACTs) that can best suit the purpose and need of the project. In general, use A+B+I/D when early completion is desired. Use NEB when a specific date of completion needs to be achieved at all cost. Use LR to minimize peak hour closure in a flexible way. Figure 3-3. Step 1—Determine the appropriate ACT or ACTs (step and sub-steps). Step 1 Determine Appropriate ACT

CTD Guide for Urban Projects with Incentive Provisions 47   Step 1 Determine Appropriate ACT Figure 3-4 provides an overview that summarizes key aspects of Step 1. Required documents and information. Project scoping and design documents, project purpose and need statement, and traffic data (e.g., AADT and truck percentage) of the project location. Other related documents, such as hourly traffic data, demographics, and businesses in the surrounding area, will also greatly help the determination of ACT. The outcome of this step. A selected alternative contract technique or a combination of alternative contracting provisions (like A+B+I/D) based on project type, size, scope, and the urgency of completion. The methods and tools used in this step. A list of questions to help agency identify urgency of completion for a project. State laws and regulations (e.g., certain states have laws and regulations preventing the agency from implementing contracts that waive, release, or extinguish the rights of a contractor to seek recovery, which typically exists in a NEB contract). FHWA and state DOT guidebooks on accelerating contracting methods that also provide some baseline criteria for ACT selection. Emerging technology. GIS-based database for information of the network-level traffic flow, demographics, and other socioeconomic data. Figure 3-4. Overview of Step 1—Determine the appropriate ACT or ACTs.

48 Systematic Approach for Determining Construction Contract Time: A Guidebook 3.3.2 Step 2—Identify “What-If” Scenarios When determining contract times for urban projects, choices of lane closure schemes (e.g., single-lane closure, double-lane closure, and full-lane closure with counter-ow trac) and con- struction windows (e.g., nighttime, weekday, weekend, and around-the-clock) play an important role. Some states (e.g., California, Texas, Minnesota, and Washington) have implemented a com- prehensive schedule-trac-cost integration analysis approach. As shown in Figure 3-5, four steps are recommended to identify and propose feasible “What-if” scenarios: (1) identify the project constraints with respect to the duration and occurrence of lane closure options, (2) identify the available construction window, (3) identify feasible trac control options based on the con- straints, and (4) propose alternatives that can satisfy all the identied constraints. Step 2 Identify “What-if” Scenarios Identify available construction window Identify feasible traffic control options Propose “What-if” alternatives Identify project constraints Sub-Step 2—Identify available construction window. Based on project constraints, identify feasible construction alternatives with duration (hours per construction window) and occurrence (start time and weekly recurrence) of the construction window. Sub-Step 3—Identify feasible traffic control options. Evaluate the feasibility of standard lane closure scenarios (e.g., single-lane, double-lane, and full- lane closure) for the project and identify those within acceptance range, improvising them to satisfy the needs of the project if necessary. Sub-Step 4—Propose “What-if” alternatives. Based on the results of the previous two sub- steps, propose alternatives that can satisfy all constraints. Optional: Score all valid alternatives based on want and don’t want criteria and select the top alternatives. Sub-Step 1—Identify project constraints. Review local and state law and regulations to identify the project constraints, list all the must do and can’t do activities, and determine the want and don’t want activities based on the project’s purpose and goal. Figure 3-5. Step 2—Identify “What-If” scenarios (step and sub-steps).

CTD Guide for Urban Projects with Incentive Provisions 49   Step 2 Identify “What-if” Scenarios Required documents and information. State regulations, federal or state agency guidelines, regional Traffic Management Plan (TMP) guidelines, nighttime construction regulations, and number of lanes in each direction. The outcome of this step. Several construction alternatives with defined construction windows (e.g., 8-hour nighttime window on weekdays starting from 9:00 PM) and traffic control options (e.g., sequential single-lane closure). Emerging technology. CA4PRS, AASHTOWare, QuickZone, and CO3 (see Appendix A). The methods and tools used in this step. Can be done manually (using a spreadsheet application or using MS Project). Alternative scenario analysis for integrated schedule analysis can be assisted by decision-support software like CA4PRS (see Appendix A). Figure 3-6. Overview of Step 2—Identify “What-if” scenarios. Figure 3-6 provides an overview that summarizes key aspects of Step 2.

50 Systematic Approach for Determining Construction Contract Time: A Guidebook 3.3.3 Step 3—Estimate Project Duration Aer the appropriate ACT has been determined and several feasible construction alternatives have been proposed, it is time to estimate the project duration in terms of the number of working days. e outcome of this step is the PDE. State DOTs already use various methods to estimate the number of working days (see Step 1—Estimate the Project Duration [in Working Days] in Chapter 2); however, for purposes of estimating project duration in relation to the ACT, three sub-steps are recommended (see Figure 3-7). Figure 3-8 provides an overview that summarizes key aspects of Step 3. Sub-Step 1—Determine the basis of the estimate. Determine the method that will be used to estimate project duration (see Step 1 in Chapter 2). Identify all information required, such as production rate of each activity, to prepare the basis for the PDE. Sub-Step 2—Identify and assign risks. Review preliminary risk analysis results from project scoping and design process and identify risks that might affect production rates or impact construction schedule. Document all identified risks and quantify their impact levels. Modify the affected production rates based on identified risks. Sub-Step 3—Estimate the number of working days. Based on the modified production rates, determine the duration of each activity and develop a sequence logic. Then, estimate the number of working days for each identified construction alternative. Determine estimate basis Identify and assign risks Estimate number of working days Figure 3-7. Step 3—Estimate project duration (step and sub-steps). Step 3 Estimate Project Duration

CTD Guide for Urban Projects with Incentive Provisions 51   Required documents and information. Construction alternatives (identified from Step 2) with construction windows and lane closure options. A list of construction activities and production rates of each activity. Preliminary risk analysis results from the project scoping and design process. The outcome of this step. An estimate of the number of working days for each alternative, adjusted based on the quantitative results obtained in the project duration risk analysis. The methods and tools used in this step. Can be done manually (using a spreadsheet application or using MS Project). Software like CA4PRS can help the agency handle alternative scenario estimates for an integrated schedule analysis (see Appendix A). PDE methods like bar charts, CPM, PERT, and Monte Carlo simulation. Emerging technology. P6, CA4PRS, AASHTOWare, QuickZone, ICSES, and KY-CTDS (see Appendix A). Figure 3-8. Overview of Step 3—Estimate project duration. Step 3 Estimate Project Duration

52 Systematic Approach for Determining Construction Contract Time: A Guidebook 3.3.4 Step 4—Assess Mobility Impact e objective of this step is to assess and quantify the trac mobility impact. For each alter- native, the assessment includes estimates of daily and total RUCs and mobility impacts (e.g., delayed time due to work zone trac impact). Figure 3-9 provides additional information about each of the sub-steps in Step 4, and Figure 3-10 summarizes key aspects of this step. Step 4 Assess Mobility Impact Sub-Step 1—Prepare the basis of the estimate. Gather key information about the work zone areas, such as lane width, number of lanes, direction of travel, traffic pattern and volume, and speed limits. Then review the project phasing, duration, and lane closure plan for each alternative. Sub-Step 2—Estimate the traffic delay. Based on all information compiled (hourly traffic volume, truck percentage, lane width, lane closure option, etc.), estimate the traffic delay time anticipated around the work zone for each identified alternative. Sub-Step 3—Assess the mobility impact. Based on the project duration, traffic demand, and estimated traffic delay, calculate total road user costs. Assess the DRUC and peak-hour delay time. Review the results and eliminate the alternatives that may cause an intolerable amount of delay and road user costs. Prepare estimate basis Estimate traffic delay Assess mobility impact Figure 3-9. Step 4—Assess mobility impact (step and sub-steps).

CTD Guide for Urban Projects with Incentive Provisions 53   Step 4 Assess Mobility Impact Required documents and information. Key information of the work zone, such as traffic pattern and volume, number of lanes, number of lanes closed, work time, lane closure length, lane width, grade, road type, direction of travel, area type (urban), driver composition, normal speed limits, and work zone speed limits. The outcome of this step. DRUC, total road user costs throughout the project, and maximum delay time for each alternative. The methods and tools used in this step. Can be done manually (using a spreadsheet application). Available software (e.g., CA4PRS) can help when estimating traffic delay and impact for an integrated schedule/cost/traffic analysis (see Appendix A). Three main approaches to traffic delay estimation of work zones: • Parametric/analytical approaches (i.e., multiregression approach, speed-flow relationship approach, generic multiplicative approach). • Non-parametric approaches (i.e., neural-network approach, decision-tree approach). • Simulation approaches (i.e., microscopic simulation using PTV VISSIM and TSIS-CORSIM). Emerging technology. CA4PRS, AASHTOWare, QuickZone, and CO3 (see Appendix A). Figure 3-10. Overview of Step 4—Assess mobility impact.

54 Systematic Approach for Determining Construction Contract Time: A Guidebook 3.3.5 Step 5—Select the Most Feasible Option Aer accounting for prioritized values and/or trade-os with regard to project duration, cost, and the amount of trac disruption for each of the alternatives considered, the agency can then select the most feasible and economical option for the given project. Figure 3-11 provides details for each of the sub-steps involved in Step 5, and Figure 3-12 provides an overview that summarizes key aspects of this step. Step 5 Select the Most Feasible Option Prioritize project goals Evaluate each alternative Select the most economical option Develop evaluation criteria Sub-Step 1—Prioritize the goals of the project. Examine public needs and concerns and then reevaluate and prioritize each primary goal of the project based on the level of urgency and socioeconomic impact. Sub-Step 3—Evaluate each alternative. Review and compile estimates and assessments of each alternative. Apply the criteria to score each alternative and evaluate the overall socioeconomic benefit. Sub-Step 4—Select the most economical option. Calculate the total score of each alternative and select the alternative with the highest score. Sub-Step 2—Develop evaluation criteria. Develop evaluation criteria for qualitative goals (e.g., public concerns and inconveniences) and assign weights to quantitative goals (e.g., project duration, traffic impact, and cost) based on project priority. Figure 3-11. Step 5—Select the most feasible option (step and sub-steps).

CTD Guide for Urban Projects with Incentive Provisions 55   Step 5 Select the Most Feasible Option Required documents and information. Project goal and objective statements, the agency’s Regional Traffic Plan, and the TMP plan. The estimated project duration (from Step 3), road user costs, and an estimated traffic delay for each alternative. The outcome of this step. A final alternative that can maximize the socioeconomic benefit and traffic control options and minimize work time, estimated project duration, traffic delay, and DRUC. The methods and tools used in this step. Can be done manually (with the help of a spreadsheet program). Software with integrated schedule/cost/traffic analysis (e.g., CA4PRS) can help the agency combine the analysis results from the PDE (obtained in Step 3), RUC, and traffic delay (obtained in Step 4), compare all alternatives, and select the most feasible ACT. A systematic decision-making process like Kepner-Tregoe Decision Analysis can help agencies define clear project goals, objectives, and priorities, and establish a rational evaluation criteria and selection process. Emerging technology. CA4PRS (see Appendix A). Figure 3-12. Overview of Step 5—Select the most feasible option.

56 Systematic Approach for Determining Construction Contract Time: A Guidebook 3.3.6 Step 6—Determine Risk Level ACTs are likely to increase the possibility of change orders, which can result in substantial delays in contract time. erefore, it is crucial to identify any potential risks associated with external factors that may aect the completion time of the project. Figure 3-13 provides descrip- tions of the sub-steps taken to determine an overall risk level, and Figure 3-14 provides an overview that summarizes key aspects of this step. Step 6 Determine Risk Level Identify ROW issues Identify network- level traffic impact Identify potential utility conflicts Sub-Step 1—Identify ROW issues. Gather ROW maps to identify and list all ROW issues. Collect information regarding real property interests to determine real property requirements. Conduct a ROW assessment to estimate potential impacts on contract time. Sub-Step 3—Identify the network-level traffic impact. Collect information about adjacent projects. Assess the collective traffic impact at the network level. Identify interfaces with adjacent projects, then, coordinate the schedules of all adjacent projects to assess the impacts on contract time of the adjacent projects. Sub-Step 2—Identify potential utility conflicts. Gather information from utility owners to identify potential utility conflicts. Compile all utility information for impact assessment and measurements preparation and then assess the utility impacts on contract time. Figure 3-13. Step 6—Determine risk level (step and sub-steps).

CTD Guide for Urban Projects with Incentive Provisions 57   Step 6 Determine Risk Level Required documents and information. ROW maps, ROW availability records, and property owners’ real property interests. Utility information with mark-up drawings. Schedules and phasing plans of adjacent projects. The outcome of this step. Risk-adjusted contract time for the final alternative. For more complex projects, a full set of documents to record the results of the systematic risk analysis is also highly valuable. The methods and tools used in this step. Can be done manually (using a spreadsheet application). Requires discussion with property owners, utility owners, and adjacent project teams. Software like P6, CA4PRS, and AASHTOWare can assist with evaluating network- level traffic impacts (see Appendix A). Systematic risk analysis methods (e.g., quantitative risk analysis using Monte Carlo simulation and feasibility risk assessment with cost-benefit analysis to evaluate the schedule impact of risks) can help the agency better cope with the probabilistic nature of uncertainties especially for large, complex, urban projects. Emerging technology. P6, CA4PRS, AASHTOWare (see Appendix A). Figure 3-14. Overview of Step 6—Determine risk level.

58 Systematic Approach for Determining Construction Contract Time: A Guidebook Step 7 Adjust Project Duration in Step 3 3.3.7 Step 7—Adjust Project Duration in Step 3 For the selected nal alternative, an accelerated production rate may need to be applied because it is expected that the contractor may use more resources when I/D clauses are included in the contract. Typically, 15 percent to 20 percent more resources are used in projects with I/D clauses as compared to a conventional schedule. Because of the adjusted production rates for key activities, the PDE that was obtained in Step 3 needs to be updated. An I/D amount is determined based on the adjusted DRUC. Figure 3-15 provides descriptions of the sub-steps taken to adjust the project duration obtained in Step 3, and Figure 3-16 provides an overview that summarizes key aspects of this step. Identify I/D provisions Determine I/D amounts Apply accelerated production rate Sub-Step 1—Identify I/D provisions. Identify the I/D provisions that will be applied for the selected alternative (ACT). Sub-Step 3—Determine I/D amounts. Based on the DRUC, determine the daily I/D amounts. Based on the peak-season traffic volume and DRUC, determine the NEB amount. Based on the hourly traffic delay and RUC, determine the LR fee, and then adjust the I/D amount by applying a realistic discount factor to the amount. Sub-Step 2—Apply accelerated production rate. An overestimated project duration will likely cause the contractor to gain a large amount of bonus without extra effort and may result in ineffective spending by the agency. To avoid this possibility, apply the accelerated production rates based on the project type, scope, and ACT. Figure 3-15. Step 7—Adjust project duration in Step 3 (step and sub-steps).

CTD Guide for Urban Projects with Incentive Provisions 59   Step 7 Adjust Project Duration in Step 3 Required documents and information. The DRUC and adjusted project duration based on the final alternative (selected ACT or combination of ACTs). The outcome of this step. The final number of working days, and the I/D, NEB, and/or LR amounts for the selected ACT or combination of ACTs. The methods and tools used in this step. This step can be done manually (using a spreadsheet program like MS Excel). Software like CA4PRS can help the agency to calculate the accelerated schedule and determine an I/D amount (see Appendix A). The determination of a realistic discount factor for a proper incentive amount requires the following principles: • The RUC should be the upper bound of the amount. • The estimated extra contractor’s expense to accelerate the project should be the lower bound of the amount. • Quality factors (such as level of service [LOS]) and the agency’s financial plan to reach the optimal discount factor should be taken under consideration. Emerging technology. CA4PRS, AASHTOWare (see Appendix A). Figure 3-16. Overview of Step 7—Adjust project duration in Step 3.

60 Systematic Approach for Determining Construction Contract Time: A Guidebook Step 8 Maximum Time Allowed 3.3.8 Step 8—Maximum Time Allowed It is recommended that urban ACT projects dene the contract time by calendar days or in relation to a xed completion date. Conversion of working days to calendar days is needed to determine the most reasonable contract time and to ensure that the project will be completed within the acceptable timeline. e conversion process accounts for weather, holidays/weekends, and other non-workdays during the construction time. (In Chapter 2, Step 4—Convert Working Days to Calendar Days is directly applicable for this step.) Figure 3-17 provides descriptions of the sub-steps taken to maximize the time allowed, and Figure 3-18 provides an overview that summarizes key aspects of this step. Develop an integrated working calendar Convert into calendar days Sub-Step 1—Develop an integrated working calendar. Develop an integrated working calendar that incorporates various non-work constraints on contract time. An integrated calendar is a combination of two types of calendars: one applicable to all work activities and the other relevant to only some specific activities. The following are examples of those calendars: • Base calendar—Specifies the typical weekly working schedule; • Holiday calendar—Typically includes state- recognized holidays; • Winter shutdown calendar—Includes the period of time that the project shuts down due to severe weather; • Environmental calendar—Includes the period of time that specific activities are not allowed to work due to ecological constraints; and • Landscaping calendar—Includes time restrictions for landscaping activities. Sub-Step 2—Convert into calendar days. Convert working days to calendar days using the integrated working calendar. Figure 3-17. Step 8—Maximum time allowed (step and sub-steps).

CTD Guide for Urban Projects with Incentive Provisions 61   Step 8 Maximum Time Allowed Required documents and information. The anticipated letting time, project duration in working days, state regulations, federal or state agency guidelines, standards specifications, CTD manuals, construction manuals, project requirements, and design plans. The outcome of this step. For A+B+I/D: Final number of calendar days for the contract and the daily I/D amount. For NEB: Final completion date and the NEB amount. For LR: LR hourly fees for each lane closed. The methods and tools used in this step. Tool T2.5 provides a spreadsheet-based automated tool (see Appendix A). Emerging technology. Not applicable. Figure 3-18. Overview of Step 8—Maximum time allowed.

62 Systematic Approach for Determining Construction Contract Time: A Guidebook 3.4 References Anderson, S. D., and I. D. Damnjanovic (2008). NCHRP Synthesis 379: Selection and Evaluation of Alternative Contracting Methods to Accelerate Project Completion. Transportation Research Board of the National Academies, Washington, D.C. Choi, K., Y. H. Kwak, and B. Yu (2010). “Quantitative Model for Determining Incentive/Disincentive Amounts rough Schedule Simulations.” Proceedings of the 2010 Winter Simulation Conference, WSC 2010, Baltimore, MD, 5–8 December 2010. IEEE 2010, ISBN 978-1-4244-9864-2, 3295–3306. Choi, K., Y. H. Kwak, J.–H. Pyeon, and K. Son (2011). “Schedule eectiveness of alternative contracting strategies for transportation infrastructure improvement projects.” Journal of Construction Engineering and Manage- ment, 138(3), 323–330. Available at: https://doi.org/10.1061/(ASCE)CO.1943-7862.0000431. Choi, K., H. W. Lee, J. Bae, and D. Bilbo (2016). “Time-cost performance eect of change orders from accelerated contract provisions.” Journal of Construction Engineering and Management, 142(3). Available at: https://doi.org/ 10.1061/(ASCE)CO.1943-7862.0001071. 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. Lee, E. B., K. Choi, and S. Lim (2008). “Streamlined strategies for faster, less trac-disruptive highway rehabili- tation in urban networks.” Transportation Research Record: Journal of the Transportation Research Board, 2081(1), 38–45. Available at: https://doi.org/10.3141/2081-04. Napolitan, F., and P. C. Zegras (2008). Shiing urban priorities? Removal of inner city freeways in the United States.” Transportation Research Record: Journal of the Transportation Research Board, 2046(1), 68–75. Avail- able at: https://doi.org/10.3141/2046-09. Zhai, D., Y. Shan, R. E. Sturgill, T. R. Taylor, and P. M. Goodrum (2016). “Using parametric modeling to estimate highway construction contract time.” Transportation Research Record: Journal of the Transportation Research Board, 2573(1), 1–9. Available at: https://journals.sagepub.com/doi/pdf/10.3141/2573-01.

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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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