Systematic Procedures to Determine Incentive/Disincentive Dollar Amounts for Highway Transportation Construction Projects [Research Brief]
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2012-06-01
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Abstract:The Federal Highway Administration (FHWA) has encouraged state transportation agencies (STAs) to implement Incentive/Disincentive (I/D) contracting provisions for early project completion to minimize traffic disruption during highway construction. The FHWA recommended that an I/D amount be calculated based on the estimated road user costs on a project-by-project basis. Although general guidelines to determine the I/D dollar amount for a project have also been published by STAs, there is no systematic tool in use to determine optimum I/D dollar amounts for I/D projects considering road user cost, agency cost, contractor’s acceleration cost, and contractor’s cost savings. Therefore, systematic procedures and models to assist project planners and engineers in determining an appropriate I/D dollar amount are essential to optimizing the use of I/D contracting techniques.
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