Section IV Other Issues

1
Section IV - Other Issues

• Non-Traditional Contracting Practices
• Architect/engineer (A/E) Consultant Procurement
• Intelligent Transportation System (ITS)
• Transportation Enhancement (TE) Projects
• National Recreational Trails Program
• Emergency Relief (ER) Projects
• Metrication
• Owner Controlled Insurance Programs (OCIP)
  /Wrap-up Insurance
• Project Labor Agreements

p. 163-186
2
A. Non-Traditional Contracting Practices

• HQ Memo - Innovative Contracting Practices and
  Special Experimental Project No. 14, 02/13/1990
  (p A-125)
• HQ Memo -"Transportation Research Circular No.
  386, Innovative Contracting Practices, "
  02/19/1992
• HQ Memo - "Special Experimental Project No. 14, "
  05/04/1995
• Applies to all Federal-Aid highway construction
  projects

p. 163-172
3
Special Experimental Project No. 14Innovative
Contracting

• Initiated by HQ memo of 2/13/90
• Objective - Evaluate project specific contracting
  practices which
• Maintain product quality
• Reduce life cycle cost
• Practices proposed for evaluation
• Cost-plus-time Bidding
• Lane Rental
• Warranty Procedures
• Design-Build

4
Experimental Methods

• Indefinite Delivery/Indefinite Quantity (ID/IQ)
• No Excuse incentive (bonuses)
• Lump sum bidding
• Best Value
• Alternate pavement type bidding
• Bid Averaging not acceptable
• Reverse auction bidding not acceptable

p. 164-166
5
Non-Experimental Methods

• Cost-Plus-Time Bidding (AB)
• Lane Rental
• Alternate Bids
• Warranty Clauses
• Design-build

p. 166-172
6
Cost-Plus-Time Bidding

• Commonly referred to as AB bidding
• Award to the lowest ABx where
• A Traditional bid component
• B Contractors bid for the number of days to
  complete critical work
• x an amount based on road user cost per day
• Include incentive/disincentive (I/D) provisions
  in the contract

p. 166-167
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Example of AB Bidding
Kentucky Road User Cost (x) 5,000 / day
A B Bx ABx 1 15.636 450 2.250 17.886 2 1
6.070 426 2.130 18.200 3 15.628 523 2.615 1
8.243
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Why AB Bidding?

• Public Expectations
• Get In! ( do it right the first time)
• Dont delay me!
• Get Out!!! ( Finish on time)
• STAY OUT!!!!

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The Appropriate Club for the Situation

• Should not be used routinely
• Reserve for projects with great urgency
• Short duration
• Clean plans
• Resolved potential ROW and utility conflicts
• Little chance for field changes

10
Lane Rental

• Assess a rental fee for each lane taken
  out-of-service during construction.

• Goal minimize road user impacts during
  construction.

p. 167
11
Maine DOTs First Lane Rental Project

• 6.6 million I-295 roadway and bridge
  rehabilitation
• Combined AB bidding and lane rental
• Did not include a bid item for rental
• MDOT Planning estimated RUC at 60,000/day I/D
  amount used was 12,500
• Lane Rental varied from 500 -2,000/lane/hour

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Why Use Lane Rental?

• Natural supplement to AB for selected projects
• Appropriate for short term, hourly, daily,
  intermittent type lane closures. Long duration
  closures should probably use AB bidding, I/D or
  LD.
• Provides the contractor with the motivation to
  minimize traffic disruptions

13
Alternate Bids

• 23 CFR 635.411(b)
• Federal Register 8/15/95 Alternate Design for
  Bridges
• Applies to NHS highway construction projects
• Minimize overall project cost through increased
  competition
• Allows alternate designs and/or construction
  methods

Pg. 167-169
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Alternate Bids

• Design Studies, VE
• Standard Plans
• Bidding Documents, Contract Plans

15
Alternate Bids

• Bridge Type
• Pavement Type
• Additive

16
Warranty - a definition

• An assurance by the seller that the product will
  perform as specified for the buyer for a specific
  period of time

17
Warranties for Federal-Aid Contracts

• 23 CFR 635.413
• STA may use warranty provisions on NHS projects
• Must be for a specific product or feature
• Not for routine maintenance
• Must be for items within the control of the
  contractor
• May be used for Design/Build

Pg. 169-170
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Current Warranty Use

• Asphalt Concrete / Rubberized Asphalt (3-8 yr)
  AL, CA, CO, FL, IN, ME, MI, MO, OH, NV, WI
• Asphalt Crack Treatment (2 yr) MI
• Bridge Components (5-10 yr) WA, ME
• Bridge Painting (2-10 yr) IN, MA, ME, MI, NH
• Chip Sealing (1-2 yr) CA, MI
• ITS Buildings (2-3 yr) VA, NC
• Landscaping, Irrigation (1 yr) WY
• Microsurfacing (2 yr) CO, MI, NV, OH
• Pavement Marking (2-6 yr) FL, MT, OR, PA, UT, WV
• Roofing (10 yr) HI

19
Agency Reasons for Using Warranties

• Reduce STA personnel on projects
• Eliminate early maintenance costs
• Replace loss of state expertise
• Increase quality
• Encourage innovation
• Industry standard

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Design-Build
23 USC 112(b)(2) Qualifications based Selection,
Engineering / Design Services
23 USC 112 (b)(1) Competitively Bid (Low
bid) Construction Contracts
Design-Build 23 CFR 636
Pg. 171-172
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Design-Build Regulations

• The Design-Build Final Rule went into effect
  01/09/2003, establishing 23 CFR 636
• States could use design-build without HQ approval
  for
• ITS projects 5 million
• Other projects 50 million
• SEP-14 continued for smaller projects

22
SAFETEA-LU, 1503

• Required several changes to 23 CFR 636
• NPRM published 5-25-2006
• Proposed changes would allow the following
  activities to start prior to completion of NEPA
• Issue RFP
• Award contract
• Issue NTP for preliminary design
• Removes the thresholds for qualified projects
• SEP-14 only required by D-B projects that do not
  meet 23 CFR 636
• Also makes several revisions to facilitate the
  use of public-private partnerships (PPP)

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Suitability

• NEPA, and major ROW and utility issues must be
  clear
• Should have a Strong design component
• Reasons for selection should not be
• Obligation of funds
• Compensate for inadequate agency resources

24
Innovative Contracting Best Practices Web Site

• Utah State University
• http//www.ic.usu.edu
• Practical information on warranties, AB, Lane
  Rental and Design-build contracting
• What is it?
• Why should you use this?
• Criteria for project selection?
• Who is currently using it?
• Example provisions

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B. Architect /Engineer Consultant Procurement

• Brooks Act requires qualifications-based
  selection
• Only applies to Federally-funded A/E contracts
• Negotiation with the highest qualified firm

pg. 172-176
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C. Intelligent Transportation System (ITS)
Projects

• Normally included in construction contracts
• If the scope does not meet construction (23 USC
  112) then it may be a service contract
• Appendix A-140

pg. 176-178
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D. Transportation Enhancement (TE) Projects
Landscaping
Outdoor Advertising
Pedestrian and Bicycle Facilities
Scenic Easements
Archaeological Work
Preservation of Abandoned RR Corridors
Scenic Highways
Transportation Museums
Historic Preservation
Rehabilitation of Historic Transportation
Structures
Highway Runoff
pg. 178-179
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TE Projects (continued)

• Procurement - Mr. Ptaks 11/12/96 memo - Is the
  project on highway right-of-way? (pg. A-143)
• Davis-Bacon - 7/28/94 memo
• 1) On local road or rural minor collector?
• 2) Tied to a covered Federal-aid project?

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E. National Recreational Trails Program

• See the 4/1/99 HQ memo and guidance
  athttp//www.fhwa.dot.gov/environment/rectrails/g
  uidancememo.htm
• Generally procured using STA procedures
• Depending on location, Davis-Bacon may not apply
• Buy America applies

pg. 179
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F. Emergency Relief Projects

• For detailed guidance see FHWAs Emergency
  Relief Manual
• Must be on a Federal-Aid Highway or a Federal
  road (as defined in 23 USC 101)
• 100 Million available nationwide/year
• 100 participation, for the first 180 days for
  emergency repairs
• restore essential travel
• minimize damage
• protect remaining facilities

p. 180-182
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Emergency Relief

• Perform Emergency repairs by negotiated
  contract or public agency force account.
• Use Competitive bidding unless another method is
  cost effective (23 CFR 635.204)
• Public agency force account may be used w/o
  formal finding (23 CFR 635.204b)
• 700,000 per incident minimum

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G. METRICATION

• Metric Conversion Act of 1975 - voluntary
• 1988 Omnibus Trade and Competitiveness Act -
  requires all Federal agencies to convert
• FHWA rulemaking - conversion deadline 9/30/96
• NHS Designation Act, Nov 1995
• Postponed deadline to Oct 1, 2000
• Prohibited FHWA from mandating sign legend
  conversion nationwide indefinitely
• TEA-21 - removed deadline made conversion
  optional

(pg. 182-183)
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Percent of 1997 Construction Program inMetric
Units1996 AASHTO Survey
76 - 100 in metric units
51 - 75 in metric units
26 - 50 in metric units
0 - 25 in metric units
34
Status of MetricationAs of 04/28/2005
SI
IP (MT, NH, NY)
Transition SI to IP (CA)
Dual Units (NJ, VT)
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H. Owner Controlled Insurance Programs/Wrap Up
Insurance

• Owner purchases insurance on behalf of contractor
  for onsite work.
• Typically covers all contractors, subs,
  construction managers and owner
• Workers Comp, general liability, excess
  liability, professional liability, builders risk,
  railroad protective liability, etc.

p. 184-185
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Wrap-up Insurance (continued)

• Potential Benefits
• May be cost-effective on mega-projects
• improved safety coordination
• benefits small firms or firms with less desirable
  safety records
• potential for reduced costs

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Wrap-up Insurance (continued)

• Potential Disadvantages
• May not be cost-effective on other than
  mega-projects
• benefits firms with less desirable safety records
  (places safer firms at a competitive
  disadvantage)
• potential administrative burden

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Wrap-Up (continued)
MI - Blue Water Bridge 90 M Detroit I-75/I-696
110M
UT - State Construction Program ?? I-15 1.5 B
MA - Central Artery 14 B
CO I-25 1.5 B
PA Penn DOT I 99, 3 contracts
NM 44 400M
FL - Suncoast Parkway 210 M
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I. Project Labor Agreements

• A definition
• A project specific, pre-hire collective
  bargaining agreement between contractors, or
  project owners, and all the labor unions
  representing the crafts that are needed for a
  construction project.

p. 185-186
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Typical PLA Coverage

• Applies to all work on a project or at a location
• Signatory unions become representatives for all
• Supercedes all other bargaining agreements
• Prohibits strikes / lockouts
• Nearly all hiring through union referrals
• Binds all subcontractors at any tier
• Uniform work rules (overtime, hours/wk,
  conditions, etc.)
• Prescribed craft wages ( Davis-Bacon)

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Purported PLA Advantages and Disadvantages

• Advantages
• No strikes or lockouts
• Labor costs are defined and set
• Reliable supply of labor

• Disadvantages
• Compliance with 23 CFR 635.117(b) ?
• Cost Effectiveness
• Labor conditions and costs are already set by DOL
• Discriminatory against open-shop contractors
• Will raise D-B rates / cost of construction

42
PLA Implementation

• February 17 2001, President Bush signed an
  Executive Order which prohibits the use of
  Government-mandated project labor agreements on
  Federal-aid projects.
• Construction contractors are free to enter into
  voluntary agreements.

• Used on Boston Central Artery and the Baltimore
  Fort McHenry Tunnel Projects
• Uses after 6/5/97
• Golden Gate Bridge
• City of Duluth, MN
• I-287 NY State DOT

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Any Questions?
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This isreally,Really,THE END!!