Development of a procedure for updating liquidated damage rates used in ALDOT construction contracts.

Details

• Creators:
  Zech, Wesley C. ; Crowley, Larry G. ; Bailey, Clark B.
• Corporate Creators:
  Auburn University. Highway Research Center ; Auburn University. Dept. of Civil Engineering
• Corporate Contributors:
  Alabama. Dept. of Transportation
• Subject/TRT Terms:
  • Contracting
  • Contracts
  • Loss and damage
  • Construction
• Resource Type:
  Tech Report
• Geographical Coverage:
  United States ; Alabama ; Maryland ; New York ; Pennsylvania ; Washington Metropolitan Area ; Washington (District of Columbia) ; Australia ; Tasmania ; United Kingdom
• Edition:
  Final report
• Corporate Publisher:
  Auburn University. Highway Research Center
• Abstract:
  This research effort sought to develop statistically justifiable means for developing a ; schedule of liquidated damage (LD) rates to be adopted by the Alabama Department of ; Transportation (ALDOT). The procedure outlined is to be used to review and update the ; LD rates found in ALDOTs standard specifications for highway construction contracts, ; since their current schedule and review procedure has come under legal scrutiny. After a ; review of pertinent literature on the subject, it was determined that there was lack of ; documentation concerning State Highway Agencies (SHAs) use of LDs. As a result, an ; electronic survey was created and sent out to all SHAs to determine the state-of-the practice ; regarding the use of LDs by SHAs in construction contracts. This survey ; experienced a 100% response rate. Using the knowledge obtained from the survey, two ; statistically justifiable methodologies were developed to calculate LD rates using ; historical project cost accounting data including: (1) a traditional LDs provision based on ; FHWA guidelines with the LD rates stipulated in a table as a function of contract value, ; and (2) a more complex table in which the LDs rates are categorized by contract value as ; well as by project type (i.e. bridge, road, building, etc.). These methods were then ; compared to the current ALDOT procedure. The first methodology which stipulates LD ; rates in a table by contract value was determined to be the most robust method. The ; project type method successfully stipulated LDs by both contract value and project type, ; but assumptions were made concerning the project type designations due to lack of ; information in the historical project data, introducing bias to the procedure weakening its ; objectivity. The final product of this research effort is a set of stepwise guidelines for ; practitioners to reference when reviewing and updating their schedule of LD rates.
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• Format:
  PDF
• Funding:
  Project Number: 930-656
• Download URL:
  https://rosap.ntl.bts.gov/view/dot/32138/dot_32138_DS1.pdf
• File Type:
  [PDF - 3.83 MB]
• Collection(s):
  US Transportation Collection
• Main Document Checksum:
  urn:sha256:b57dd3b359e1e0ff93718da834c635cc08fc8d093e845725c6b264c2378da266