Analyzing decision making in alternative contracting for highway pavement rehabilitation projects

The negative impacts associated with highway pavement rehabilitation projects drove state highway agencies (SHAs) towards increased adoption of alternative contracting methods (ACMs) to accelerate the construction of such projects; hence, reducing these impacts on the travelling public. However, the application of such methods showed mixed results due to the lack of specific guidelines addressing the adoption of such methods and the selection of the best ACM for each project. This lack of guidelines stems from the lack of research studies examining the impact of each of these methods on the time/cost trade-off relationship in highway rehabilitation projects. Existing literature includes several studies aimed at developing generic and subjective guidelines based on past experiences that do not take into consideration the unique nature of each of these methods. Hence, this research study aimed at analyzing the SHAs’ decision making process regarding two of the most-widely used ACMs: Incentive/Disincentive (I/D) and Cost + Time (A+B) contracting methods, in order to support decision makers in choosing the most-suitable method for their projects. To this end, two models were developed in this dissertation to examine the time/cost trade-off for each method using simulation and regression analysis. Each model was validated against real-life projects and used to assign appropriate ID and “B” values based on the SHA’s desired duration reduction and available budget. Furthermore, a risk analysis module was developed to determine the most-likely duration reduction that the contractor can achieve for each project under each method. The developed models should help improve the decision making process regarding the selection and implementation of these methods in highway rehabilitation projects. For example, the models can help SHAs identify the minimum ID level that can be offered for each project and the expected duration that the contractors can bid on under the A+B contracting method. Finally, the models were contrasted and applied to real-life projects with different characteristics to verify existing guidelines and establish the candidate ACM for each project category. The findings of this study will benefit the society, SHAs, and the economy in general by optimizing the use of available time and money resources