Strategies for Addressing Material Shortages in Construction Contracts

1. Survey Responses Regarding Current Issues and Approaches for:Price/Supply Issues, Alternate Bidding Issues, Practices for Increasing Competition AASHTO Subcommittee on Construction Contract Administration Section January 2009 Prepared by . . . . Claude Oie, Nebraska DOR Ellis Powell, NC DOT Jeff Benefield, AL DOT Jerry Yakowenko, FHWA

2. Transportation Agencies Responding – 40 (37 States, 3 other) DC Ontario Ministry of Transportation NY State Bridge Authority Puerto Rico

3. Have you experienced project delays resulting from material shortages of any of the following? (Select all that apply) Number of Agencies

4. Have you granted contract time extensions or issued any suspensions of work for specific material shortages in the past year? Yes – LA, OH, MT, UT, KS, CO, NV, WV, FL, WA, TX, CT, NYSBA

5. Selected reasons for time extensions • Time extension granted for specialty steel (not industry wide) • We suspended time on one project until the spring of '09 due to availability of polymer modified asphalt. • Time extensions have been granted for approximately 6 projects. • We allowed the contractor time before we issued the Notice to Proceed for asphalt materials to become available. • Granted time extensions to allow for material availability (certain steel piling sizes) • Have granted time extensions to contracts when it was demonstrated that the contractor did everything reasonable to obtain materials needed. We had a refinery change production rates for asphalt binder products which impacted three projects. We made adjustments to time and other suppliers were able to accommodate the shortfall.

6. Has your state terminated any contract for public convenience or cancelled any contracts due to material supply issues? Yes – UT – 2 contracts

7. Has your state developed a state-wide policy for substitution of binder where polymer modified asphalt cement is unavailable? Yes –OH, MO, NJ, CO, TX, CT

8. Has your state used state-furnished material to address material availability issues? Yes VT and KS– structural steel for fast track projects; WV – allow limited use of state stockpiles for certain traffic control and electronic devices; NYSBA – selected bridge components

9. Does your state use alternate pavement type bidding procedures?

10. If so, approximately what percent of your paving projects use alternate pavement type bidding? Number of Agencies

11. If alternate pavement type bidding is used, do you use a bid adjustment to account for life-cycle-cost differences between bituminous concrete pavements and Portland cement pavement sections? Yes LA, MT, UT, MO, KS, CO, MI, MS, FL, AL, ONT, NYSBA

12. If a bid adjustment is not used, which of the following might describe the industry’s opinion of this procedure? Number of Agencies

13. Does you state use alternate bridge type bidding?

14. contracts contracts Approximately how many contracts per year use alternate bridge type bidding procedures? Number of Agencies

15. Selected comments on alternate bridge bidding • Seems to be very effective in obtaining lowest cost. • This is used almost exclusively on design-build projects where the proposer can propose bridge type as part of their bid. • It engages the contractors and results in a more competitive nature and innovative solutions which in turns means a lower cost to taxpayers. • Allows the contractor more flexibility and may save some money. Allows for innovation. • Works well on larger structures.

16. Does your state use bid alternates (contractor’s choice) for: Number of Agencies

17. Which of the following techniques have been used to increase competition in your state? (Top ten listed) Number of Agencies

18. Indicate the top five most frequently used techniques to increase competition and the extent of use in your construction program (percent of program)