Work-Zone Traffic Control: Survey of Contracting Techniques
The final number of traffic control devices needed for a work-zone project and the final bill for those devices often vary from the initial estimates of the required number and charge. And the variance is usually an increase in the quantity and the price that adds to the state's total contract cost.
These facts stimulated a recent survey of the state departments of transportation (DOTs) by the Montana Department of Transportation (MDT) and the Federal Highway Administration's (FHWA) Montana Division to gain a comprehensive perspective of state contracting techniques for work-zone traffic control devices.
This article summarizes findings from the survey, which was conducted in spring 2000. Thirty-five state DOTs responded, providing a view of current practices across the country. An analysis of the survey results presents valuable insights that will help MDT and other state DOTs to improve their procedures and save money.
Methods of Payment
Nine of 35 states use "unit price" (per each device or per each day); eight use "lump sum" for all traffic control measures and devices; 15 use a combination of lump sum and unit price; and three states use up to three methods, including lump sum, unit price, pre-established unit price, and incidental cost to the project. Each method has advantages and disadvantages. Advantages of the unit price per device method are:
- Additional payments will not automatically be provided for time overruns.
- Bid prices are easier to track (when compared to lump sum).
A disadvantage is that inspectors need to inventory devices frequently - even daily. The advantages of lump sum payment, according to the responding states, include:
- The contractor estimates the number and type of devices and the contract amount.
- The contractor is solely responsible for marrying traffic control plans with production rates and construction methods.
- Change orders are limited.
- Devices are not individually counted.
- Contractors are paid the contract amount within contract provisions for added work or overruns.
- More up-front coordination between the state and the contractor occurs.
- The contract amount will be paid even if the contractor does not use the estimated quantities.
- The contractor is not directly paid for devices not estimated, but required, by the contract.
- The lump sum may be overpriced.
- The bid may be front-loaded through the traffic control item.
- The bid price is difficult to estimate.
- The project manager loses leverage to recommend that the contractor add additional devices.
Eighteen states had no evidence of unbalanced bids, in which the total bid is appropriate for the work to be done, but some unit prices are either abnormally high or low. Another 10 states said that unbalanced bids are rare. According to these 28 states, the absence of unbalanced bids is largely attributed to subcontracting work-zone traffic control.
Of the states that reported evidence of unbalanced bids, some reasons for their occurrence are:
- Front-loading of project payout.
- Variations from the traffic control plan.
- Inaccurate estimation of quantities.
Some states with evidence of unbalanced bids reported that the amount of money is too small to pursue; therefore, no abatement is undertaken.
Techniques to address the potential for unbalanced bids include requiring a detailed traffic control plan for each phase, ensuring accurate estimates, carefully analyzing bids to detect reasons for unbalanced amounts, rejecting and re-advertising bids when unbalancing occurs, disqualifying offending bidders, and setting minimum bid amounts on certain items.
In 18 states, change orders are not required unless the scope of the project is changed. Nine states rarely see change orders. Some form of negotiation or written justification from the project engineer is required by the states that do not use change orders for traffic control adjustments. In the states that use change orders to adjust quantities or payments for traffic control devices, change orders are typically issued when the change is ±25 percent of the contract amount, when a value engineering proposal (requiring a multidisciplinary, systematic analytical approach) is used, when an item has been omitted, or when the project time has been extended. The most common explanations for change orders include unanticipated factors, such as weather; contractor-proposed changes to methods or sequences; changes in construction phasing by DOT field offices; and correcting estimates that do not reflect contractor operations.
Contractors estimate quantities for traffic control items in only 10 of the 35 responding states. All 10 states are currently using a lump sum method of payment. Contractors in a few of the other responding states estimate quantities when proposing a phasing or sequencing change, when estimating the signs needed in addition to the state's standard signs, when extra work occurs, and when implementing a value engineering proposal.
When the contractor estimates the quantities, the contractor is responsible for the number, type, and cost of traffic control devices. This can be an advantage to the state because the state can save time by eliminating the need to develop a traffic control plan.
Disadvantages include the potential for underestimating the number of devices needed by the contractor and for disagreement between the state and contractor about the adequacy of the contractor-developed traffic control plan.
In the states that do not allow the contractor to estimate quantities, the cost and quantities are estimated using various techniques and information sources, including:
- Historical data.
- Past projects.
- Good engineering judgment.
- Size of the project.
- Average unit bid prices.
- Development of a detailed traffic control plan.
- Requirements from the Manual on Uniform Traffic Control Devices and state specifications.
- Cost per mile.
- Estimates of quantities for the most involved stage.
- Percentage of the total project cost for other items in lump sum projects.
The survey results establish a base line for MDT and FHWA's Montana Division to jointly plan and implement improvements to estimation, bidding, and contract administration.
Three actions are planned over the next year to improve the process in Montana:
- Different bidding techniques for traffic control items will be evaluated on selected projects.
- Estimators from each highway district will convene to discuss practices and to map an ideal process for estimation.
- Guidelines for project nomination will provide recommendations for appropriate bidding techniques for work-zone traffic control items dependent upon work type.
MDT is committed to increasing the quality of work-zone traffic control from three perspectives: the highway user, the project manager, and the contractor.
Improvements in bidding and estimating techniques will permit project personnel to concentrate on work-zone application and layout. These same improvements can result in efficiencies to the contractors, who can tailor work-zone traffic control to their production rates and construction methods. A final benefit is the reduction of the state's cost for work-zone traffic control through improved bidding and contract administration.
Angela Johnson is a highway engineer in FHWA's Professional Development Program. In her current position, she assists an operations engineer by reviewing design and environmental documents for construction projects in one district of Montana. Johnson and the other authors of this article were members of a committee that conducted the survey to gather and analyze data to determine a way to improve the procedures for bidding on traffic control devices and to minimize unbalanced bids in Montana. She has a bachelor's degree in civil engineering from the University of Wyoming.
Lloyd Rue is a highway engineer in FHWA's Montana Division. He is responsible for geometric design, traffic engineering, and highway safety related to the federal-aid highway program. He has a bachelor's degree in civil engineering from Montana State University and a master's degree from the University of California at Davis. He is a registered professional engineer in California and holds a professional traffic operations engineer (P.T.O.E.) certificate.
Ted Burch is a highway engineer in FHWA's Montana Division and is responsible for the managing the design, construction, and maintenance of federal-aid highway projects in Montana. He has a bachelor's degree in civil engineering from Michigan Technological University and a master's degree in engineering from Tulane University. Burch is a registered professional engineer in Louisiana.
Dick Clark is currently working for Montana's chief engineer in the areas of engineering systems application and engineering process improvements. He has a bachelor's degree in political science from Northern Montana College and a master's degree in business administration from the University of Montana. Clark has held several positions in maintenance, materials, and engineering in the field and at headquarters with the Montana Department of Transportation.