Evaluation of fuel usage factors in highway construction in Oregon.

SPR 668Prices for different construction materials change frequently. In recent years, the price for these different materials has dramatically increased. This result leads contractors to inflate the bid price for a construction project in order to cover the potential increased cost. In an attempt to modify the inflation inserted into bid prices, the Oregon Department of Transportation allows for adjustments in the monthly payment to the contractor for various inputs. One major input that receives an adjustment is fuel. The contractor is eligible to receive adjustments in the monthly payments for fuel when the project is of a certain magnitude. After the project qualifies for the adjustment, when the price of fuel varies by more than twenty-five percent positive or negative from the previous month, the ODOT will make a fuel price adjustment to the monthly payment. The fuel price adjustment is a function of a fuel usage factor. The value for the fuel usage factor for different bid items is based on an over thirty five year old 1974 national survey titled, \u201cFuel Usage Factors for Highway Construction.\u201dFrom that original survey the fuel usage factor for each bid item was recommended to be multiplied by the distance, weight, or volume built of the respective bid item, but not for structures. The fuel usage factor for structures was to be multiplied by the gallons of fuel used per $1,000 worth of work. The research presented in this report determines from a national survey whether other states, and their DOTs, use this same procedure to calculate a fuel price adjustment, and if so, whether the values for the fuel usage factors are the same. In addition, the report examines how the price of structural construction has changed over time to ascertain whether the current fuel usage factor for structures is still applicable. A new index is developed in a national model and one for the state of Oregon