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Performance contracting is designed to encourage the use of innovative products like temporary signals that adjust automatically based on traffic volume. Photos: Michigan DOT
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The extra time and materials cost of paving the shoulder was justified by the advantages of keeping two lanes of traffic open throughout construction.

To reduce traffic delays and enhance the safety of both workers and motorists, the company created a temporary driving lane by paving over an existing shoulder. The extra time and materials cost was justified by the public advantages of keeping two lanes open throughout the project. Traffic continued to flow more smoothly during construction, and with less potential for injuries, than if flaggers had been employed to direct it. Another innovation addressing the same goals was the use of temporary traffic signals that adjusted automatically based on traffic volume.

In reconstructing the two bridge superstructures that were part of the contract, Central Asphalt used precast components rather than casting the concrete in place. That decision sped up construction and contributed to timely completion of the work.

Performance contracting offered flexibility that facilitated the work. “Because we were responsible for the quality of the work and had to provide a five-year warranty for its performance, we did all our own inspections,” says Central Asphalt President Aaron White. “MDOT was more hands-off [than it would be with a more traditional contract], which made our schedule more flexible.”

Central Asphalt earned an incentive bonus for completing the project one and a half weeks ahead of schedule, and White says his team was happy with the way the job came out. “The only snag was in handling field changes,” he says. “Because performance contracting was new to everybody involved, there were some gray areas we had to work out.”

MDOT is prepared to use performance contracting procedures again, even in the absence of HfL funding. “We're already looking to do it again for an upcoming project in Midland,” Hofweber says.

Highways for Life is preparing a report on the project that will summarize the lessons learned and analyze the economic value of the innovations used. The report will be available through the HfL Web site (www.fhwa.dot.gov/hfl) in June.

HfL is a discretionary program under SAFETEA-LU, the federal transportation bill that authorized funding for fiscal years 2005 through 2009. According to Nancy Singer of FHWA, funds for additional projects are not available, and future grants will depend on the provisions of new transportation legislation to be crafted later this year. “Regardless of funds, the HfL philosophy of using innovation and performance goals will continue as an important FHWA initiative,” Singer says.

— Kenneth A. Hooker is a freelance writer based in Oak Park, Ill.

Performance-driven paving

Seven questions to raise — and answer — before deciding to hand over the reins.

In performance contracting, the owner agency defines a set of performance goals for a project, without spelling out the means by which the goals must be met. Bidders submit proposals that explain how they intend to meet the goals and at what price. Bids are evaluated not on price alone, but also on the additional value each bidder's plan is expected to provide. The owner agency agrees to a base price for meeting the project goals, as well as bonuses to be paid for exceeding the goals and penalties to be assessed for falling short. The contractor takes responsibility for the quality of the work and provides a warranty to ensure its serviceability.