Development of Utility Tools for the Innovative Construction Approach

Increasing travel demand and lack of sufficient highway capacity are serious problems in most major metropolitan areas in the United States. Large metropolitan cities have been experiencing increased traffic congestion problems over the past several years. The total delay that drivers experience has increased from 0.7 billion hours in 1982 to 3.7 billion hours in recent years. Combining the 3.7 billion hours of delay and 2.3 billion gallons of fuel consumed due to congestion, leads to a total congestion cost of $63 billion dollars for drivers in 85 of the largest metropolitan areas of the nation. In spite of the implementation of many demand management measures, congestion in most urban areas is still increasing. In many areas congestion is no longer limited to two peak hours in a day; it is extended to two to three hours in the morning, afternoon and evening. Thus, the congestion experienced on urban and suburban freeways and arterial streets results in delays to the motorist, excess fuel consumption and a high level of pollutant emission not only during the peak hours in a day, but also for several hours throughout the day. Road construction and duration of construction are considered to be factors responsible for a significant portion of traffic congestion. Innovative contracting approaches (such as A+B, Lane Rental, Incentive/disincentive (I/D) etc. methods) have been in use by various State Departments of Transportation (DOT) to reduce construction duration.. As a part of this approach, the contractor is paid an incentive to complete a project earlier than the time specified in the contract. If the contractor completes the project later than the time allowed, a penalty is charged by contractual agreement where disincentive money is subtracted from the payment due to the contractor. The use of an incentive may be cost effective in certain projects but may not be effective in other projects. Its use must be justified by comparing the cost of the incentive with savings in Road Users Costs (RUC) value. Michigan Department of Transportation has been using the innovative contracting approach for a number of years. In order to determine the effectiveness of the innovative contracting approach, a model was developed to establish a functional relationship between construction duration and construction cost using Michigan’s construction data. Two Measure of Effectiveness (MOEs) variables, “Project Time Crashing Index (TCI)” and “Project Cost Increment Index (CII)” “, were established as a part of this research. Regression technique was used to correlate CII and TCI. The final model was a non-linear model. Also as a part of this effort, a road user cost computation template and a screening template to determine the suitability of a project to be 2 considered for the innovative approach were designed. These two templates should assist state DOTs in computing construction incentive dollars as well as in determining the candidacy of a project for the innovative approach.