Best practices for budget-based design.

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    State Departments of Transportation (State DOTs) encounter difficulties in establishing feasible and reliable project budget early in the project development. The lack of a systematic process for establishing baseline budget with the consideration of potential issues (risks) that negatively impact project cost throughout project development presents a major challenge for State DOTs. The overarching objective of this research project is to develop a set of cost estimation and management practices for budget-based design that can aid GDOT project managers and engineers throughout the plan development process (PDP). To achieve the research objective, this report conducted three major tasks: (1) Reviewing state of practice of cost estimation process in other State DOTs; (2) Reviewing state of practice for fixed budgetbest value procurement method in other State DOTs; and (3) Conducting statistical analysis to identify important variables capable of explaining variations in submitted bid prices for highway projects in the State of Georgia. Cost estimation and control processes in Minnesota, California, Texas, Ohio, and Washington State DOTs are provided as examples of best practices in establishing reliable baseline cost estimates. Procurement process in Utah, Colorado, and Michigan DOTs are presented as examples of successful utilization of fixed budget-best value procurement method. The results of multivariate regression analysis show that 12 variables, including quantity of the bid item, housing market index, Georgia asphalt cement price index, total bid price, project length, 12-month percent change of Georgia asphalt cement price index, 12-month percent change of Gross Domestic Product (GDP) of the Georgia construction industry, unemployment, total asphalt volume of resurfacing and widening projects, number of bidders, project duration, and number of nearby asphalt plants have explanatory power to explain variations in submitted bid prices for major asphalt line items in the State of Georgia’s highway projects. It is also found out that 5 variables, including unemployment, 12-month percent change of Georgia asphalt cement price index, quantity of the bid item, total bid price, and Turner construction cost index have power to explain variations in submitted bid prices for projects in the Transportation Investment Act (TIA) regions.
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