Long-term warranties on highway projects.
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2008-09-01
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Alternative Title:UTCA theme: management and safety of transportation systems
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Edition:Final Report; Jan. 1, 2006-June 30, 2007
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Abstract:This report documents the state of the art and practice of warranty contracting in the United States. Background information, key elements, benefits and concerns, and lesson learned in other states regarding warranty contracting are presented in the report. Through cases studies, this research evaluates the cost-effectiveness of warranty contracting under risks and uncertainties. Based on a questionnaire survey, this research identifies widespread industrial acceptance of short-term (less than three years) warranties on highway projects in Alabama. There is also a sufficient degree of acceptance for four to five year warranties on pavement projects. However, warranty risks and liabilities, accurate warranty cost estimation, and bonding availability are still major concerns for the local construction industry. This report also assesses the legal viability of warranty contracting in Alabama. In the current legal environment, short-term warranties (workmanship and material), which are compatible with a competitive low bid system, are permitted in Alabama. However, the state legal environment is not ideal for the introduction of long-term performance warranties where the contractor assumes design responsibility. Recommended practices for successful implementation of warranty contracting are presented in this report.
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