Summary of Significant Comments and Ideas from the Nation Highway Construction Cost Workshop

Sponsored by AGC, ARTBA, AASHTO, and FHWA
September 2007

General Cost Reduction Initiatives

1. Value Engineering Change Proposals (VECPs)
   1. Encourage greater use of VECPs during construction
      1. Develop a focused promotional effort by AASHTO and FHWA to encourage VECPs
      2. Compile case studies/best practices for using VECPs
2. Constructability Reviews
   1. Encourage wider use of constructability reviews
   2. Update the AASHTO Subcommittee on Construction's 2000 document Constructability Review Best Practices Guide
   3. Compile case studies where constructability reviews have resulted in significant cost reductions
3. Standardization of Specifications
   1. Consolidate aggregate and other material specification requirements on a regional or national basis
   2. Develop uniform specification requirements where regional similarities exist (for example: Structural Committee for Economic Fabrication)
4. Alternate Bidding Procedures
   1. Encourage greater use of alternative bidding practices for pavement types, retaining walls, culverts, and other highway materials to promote competition
5. Practical Design
   1. Refine and promote a "practical design" philosophy (similar to Missouri DOT) of "doing what is required rather than what is desired"
6. Recycled Materials
   1. Promote/encourage greater use of recycled asphalt pavement and recycled concrete at the state level
   2. Promote/encourage the use of warm-mix asphalt paving
7. Contracting Efficiencies
   1. Encourage the use of web pages for pre-bid questions and answers
   2. Promote the elimination of performance bonds on small projects
   3. Promote the elimination of retention or retainage
   4. Encourage states to provide payment for stockpiled materials
   5. Provide guidance on bundling/unbundling projects where appropriate
   6. Promote the use of additive alternate bidding (or deductive alternate bidding) to ensure projects are awarded on budget

State and Federal Requirements

8. Buy America
   1. Work to revise FHWA's Buy America program to allow greater flexibility in contract administration
9. DBE
   1. Encourage FHWA to re-examine program requirements (commercially useful function, graduation requirements, etc.)
   2. Provide guidance for setting appropriate project DBE goals
10. Aggregate/Material Sources
    1. Eliminate barriers to asphalt and cement imports
    2. Support new aggregate sources, plants, and quarries at state agency and political levels
11. Programmatic Approaches
    1. Develop/promote more programmatic decision-making for the overall construction program rather than many project-by-project decisions
    2. Keep the capacity of the industry in mind for seasonal letting programs

Risk Allocation Issues

12. Price Adjustment Clauses
    1. Work with industry to develop appropriate price escalation clauses
    2. Develop guidelines for the use of price escalation clauses
13. Contract Requirements
    1. Provide reasonable night work windows
    2. Ensure that liquidated damage rates are reasonable
    3. Encourage States to eliminate the use of bid items that include excessive contingency items
    4. Provide bid items where distinct, measurable work items are being performed
    5. Limit or provide separate bid items for miscellaneous work items
    6. Revise specifications to share the risk associated with contingencies in weather-related delays (acts of God, severely unusual weather)
    7. Consider payments for mobilization/demobilization during hurricane events
    8. Use State-furnished materials for certain projects where material lead-time has a great impact on the overall project schedule