Samuel Labi

An Analysis of Cost Overruns and Time Delays of INDOT Projects

A commonality among state Departments of Transportation is the inability to complete projects on time and within budget. This project assessed the extent of the problem of cost overruns, time delays, and change orders associated with Indiana Department of Transportation (INDOT) construction projects, identified the reasons for such problems, and finally developed a set of recommendations aimed at their future reduction. For comparison purposes, data from other states were collected and studied using a questionnaire instrument. The analysis of the cost overrun, time delay and change order data was done using an array of statistical methods. The literature review and agency survey showed that time delays, cost overruns and change orders are generally due to factors such as design, unexpected site conditions, increases in project scope, weather conditions, and other project changes. The results of the agency survey showed that with regard to the problem of cost overruns, INDOT has an average rank compared to other states. Between 1996 and 2001, the overall rate for cost overrun amounts for INDOT projects was determined as 4.5%, and it was found that 55% of all INDOT contracts experienced cost overruns. It was determined that the average cost overrun amount and rate, as well as the contributory cost overrun factors differ by project type. The average cost overrun rates were as follows: bridge projects -- 8.1%, road construction -- 5.6%, road resurfacing -- 2.6%, traffic projects -- 5.6%, maintenance projects -- 7.5%. With regard to time delays, it was found that 12% of all INDOT contracts experience time delays, and the average delay per contract was 115 days. With regard to change orders, the study found that the dominant category of reasons for change orders is “errors and omissions”, a finding which is suggestive of possible shortcomings in current design practices The statistical analyses in the present study showed that the major factors of cost overruns, time delays, and change orders in Indiana are contract bid amount, difference between the winning bid and second bid, difference between the winning bid and the engineer’s estimate, project type and location by district. Besides helping to identify or confirm influential factors of cost overruns, time delay and change orders, the developed regression models may be used to estimate the extent of future cost overruns, time delay and change orders of any future project given its project characteristics and any available contract details. Such models can therefore be useful in long-term budgeting and needs assessment studies. Finally, the present study made recommendations for improving the management of projects and the administration of contracts in order to reduce cost overruns, time delays and change orders.

Life Cycle Cost Analysis for INDOT Pavement Design Procedures

Given the aging of highway pavements, high traffic levels, and uncertainty of sustained preservation funding, there is a need for balanced decision-making tools such as Life Cycle Cost Analysis (LCCA) to ensure long-term and cost-effective pavement investments. With driving forces such as Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), the National Highway System (NHS) Act of 1995, and the Transportation Equity Act for the 21st Century (TEA-21), LCCA enables evaluation of overall long-term economic efficiency between competing alternative investments and consequently has important applications in pavement design and management. It has been shown in past research that more effective long-term pavement investment could be made at lower cost using LCCA. Current LCCA-based pavement design and preservation practice in Indiana could be further enhanced by due consideration of user costs. Also, the existing Federal Highway Administration (FHWA) LCCA software could be further enhanced for increased versatility, flexibility, and more specific applicability to the needs of Indiana, particularly with regard to treatment cost estimation and development of alternative feasible preservation strategies (rehabilitation and maintenance types and timings). The study documented/developed several sets of alternative pavement design and preservation strategies consistent with existing and foreseen Indiana practice. The preservation strategies were developed using two alternative criteria – trigger values (pavement condition thresholds) and predefined time intervals (based on treatment service lives) and are intended for further study before they can be used for practice. These strategies were developed on the basis of historical pavement management data, existing Indiana Department of Transportation (INDOT) Design Manual standards, and a survey of experts. The study also found that with a few enhancements, FHWA’s current LCCA methodology and software (RealCost) could be adapted for use by INDOT for purposes of decision support for pavement investments and proceeded to make such enhancements. The resulting software product (RealCost-Indiana) is more versatile, flexible and specific to Indiana practice. The enhancements made include a mechanism by which the user can estimate the agency cost of each pavement design or preservation activity on the basis of line items and their unit rates, and a set of menus showing default or user-defined strategies for pavement preservation. Other enhancements made to the software include improved graphics, enhanced reporting of analysis results, and capability to simultaneously carry out analysis for more than two pavement design and preservation alternatives. A User Manual was prepared to facilitate the use of the enhanced software, and a Technical Manual was prepared to provide for the user a theoretical basis for various concepts used in the software. The enhanced LCCA methodology and software are useful for (i) identifying alternative INDOT pavement designs, (ii) identifying or developing alternative strategies for pavement rehabilitation and maintenance for a given pavement design (iii) estimating the life-cycle agency and user costs associated with a given strategy, (iv) comparative evaluation of alternative pavement designs. The enhanced methodology and software are applicable to existing pavements in need of some rehabilitation treatment, and also for planned (new) pavements. Future enhancements to the LCCA methodology and software may include a way to duly penalize parsimonious preservation strategies that are presently not adequately penalized for their resulting inferior pavement condition over the life cycle.

Decision support for optimal scheduling of highway pavement preventive maintenance within resurfacing cycle

This paper presents a case study for optimizing decisions on the best combination of preventive maintenance (PM) treatments and timings to be applied in the resurfacing life-cycle (interval between resurfacing events), for a given highway pavement section. In the optimization procedure, the paper incorporates key infrastructure management concepts of treatment-specific triggers, performance jump models, and performance trend models. Using a case study, the paper determines that optimization can be a viable tool to support scheduling decisions for highway preventive maintenance. Also, using sensitivity analysis, it is determined that changes in the resurfacing interval length and discount rate can influence the choice of optimal PM schedule.

Evaluating the Cost Effectiveness of Flexible Rehabilitation Treatments Using Different Performance Criteria

At a certain point in the life of a flexible pavement, rehabilitation is required to improve pavement condition and to defer reconstruction. Pavement managers seek the best rehabilitation treatment on the basis of cost effectiveness. Using 1994–2002 data from a wet-freeze mid-Western state in the United States, this paper analyzes the cost effectiveness of four flexible pavement rehabilitation treatments: functional hot-mix asphalt (HMA) overlay, structural HMA overlay, resurfacing (partial 3R standards), and mill full-depth and asphaltic concrete overlay. The performance indicator used is the international roughness index and treatment effectiveness is measured in terms of performance jump (short-term), and service life and increase in pavement performance (long-term). The treatment cost is the equivalent uniform annual cost per lane-km incurred by the agency and user; and cost effectiveness is the ratio of effectiveness to cost. The study estimated treatment effectiveness under various combinations of traffic loading and climatic condition, and initial pavement condition. The results suggest that in the short-term, HMA structural overlay is the most effective treatment. For the long-term, the results are equivocal: HMA structural overlay is most effective from the perspective of average performance over the treatment life; resurfacing (partial 3R standards) is the most effective from the perspective of treatment service life. With regard to cost effectiveness, however, the results were consistent: for all three measures of treatment effectiveness, mill full-depth and asphaltic concrete overlay unequivocally appears to be the most cost effective treatment. Finally, the paper recommends that cost effectiveness analysis should be accompanied by a candid deliberation of project constraints, the local environment, and agency practices.

The Effectiveness of Maintenance and Its Impact on Capital Expenditures

With ever increasing traffic loadings, highway pavement maintenance needs continue to outpace the availability of resources, and transportation agencies seek cost-effective maintenance practices. This study investigated the effectiveness of maintenance treatments in the short-term and the cost effectiveness of maintenance strategies over entire pavement life. The study also analyzed the relationships and trade-offs between maintenance and capital investments such as pavement rehabilitation, and the trade-offs between preventive and corrective maintenance. These analyses were carried out through a work sequence that included analyses of historical trends, literature review, and a questionnaire survey. The study found that there are significant benefits associated with maintenance treatments, and that such short-term impacts generally involve an increase in pavement condition or a decrease in the rate of deterioration. For most treatments, a greater benefit is generally obtained for a larger effort expended on the maintenance treatment, at a given level of pavement condition, up to a point. The study also found that if chosen appropriately, maintenance strategies could be cost-effective in the long run. The most cost effective strategy was determined for each pavement family. Finally, the study determined that trade-off relationships exist between intervals of capital investments on one hand, and maintenance, traffic loading, and weather on the other hand: up to a point, increasing maintenance leads to increased rehabilitation interval, while increasing traffic loads and weather severity leads to reduction in rehabilitation interval, albeit at different rates for each pavement family. Marginal effects models were used to determine the effect of unit changes in maintenance levels, traffic loading, and weather on changes in rehabilitation interval. This information is useful not only for pavement management, but also for policy analyses involving truck weights, and pavement repair needs assessment to reflect changing traffic and weather conditions in the long-term. The data for the study was supplied by the Indiana Department of Transportation.

Three-Stage Least-Squares Analysis of Time and Cost Overruns in Construction Contracts

Construction cost overrun and time overrun (delay) are a significant problem in highway-construction project delivery. Previous research studies have provided insight into the factors that affect overruns; however the findings may have been limited because they do not explicitly consider the simultaneous relationship between cost and time overruns. In this paper, we use data from Indiana highway projects to provide empirical evidence that a simultaneous relationship exists between cost and time overruns and that analysis of these two contractual outputs need to take due cognizance of such simultaneity. Using the three-stage least-squares technique, we identify a number of factors that significantly affect cost overrun and time overrun and we show how the effect of these variables vary by attributes such as project type and results of the bidding process. The models developed in this paper can help agencies enhance the estimation of the expected overruns of final cost and the delay in completion time for their planned projects.

Empirical Assessment of the Likelihood and Duration of Highway Project Time Delays

Delays in the completion of highway construction and maintenance projects are important concerns to state highway agencies and contractors alike because such time delays can have a number of adverse consequences, such as extending the duration of active work zones, contributing to road-user dissatisfaction and increasing the risk of litigation regarding delay responsibility. In this paper, using data from 1,722 highway projects in Indiana, random-parameter statistical models are estimated to study the factors that contribute to the likelihood of encountering a project time delay and its duration. The model estimation results show that the likelihood and duration of project time delays are significantly influenced by factors such as project cost (contract bid amount), project type, planned project duration, and the likelihood of adverse weather.

Efficacies of roadway safety improvements across functional subclasses of rural two-lane highways

INTRODUCTION Highway crash occurrence is a leading cause of unnatural deaths, and highway agencies continually seek to identify engineering measures to reduce crashes and to assess the efficacy of such measures. Most past studies on the effectiveness of roadway improvements in terms of crash reduction considered all rural two-lane sections as a single category of roads. However, it may be hypothesized that the differences in the mobility and accessibility characteristics that are reflected in (and due to) the different design standards between different functional subclasses in the rural two-lane highway system can lead to differences in efficacies of safety improvements at these subclasses. This paper investigates the efficacy of roadway improvements, in terms of crash reduction, at the various subclasses of rural two-lane highways. METHODS An empirical analysis of safety performance at each of the three subclasses of rural two-lane highways was carried out using the negative binomial modeling technique. For each subclass, crash prediction models were developed separately for the three levels of crash severity: property-damage only, injury, and fatal/injury. The crash factors that were considered include lane width, shoulder width, pavement surface friction, pavement condition, and horizontal and vertical alignments. After having developed the safety performance functions, the effectiveness (in terms of the extent of crash reduction, for different levels of crash severity) of highway safety enhancements at each highway subclass were determined using the theoretical concepts established in past literature. These enhancements include widening lanes, widening shoulders, enhancing pavement surface friction, and improving the vertical or horizontal alignment. RESULTS AND CONCLUSION The study found that there is empirical evidence to justify the decomposition of the family of rural two-lane roads into its constituent subclasses for purposes of analyzing the effectiveness of safety enhancement projects and thus to avoid underestimation or overestimation of benefits of safety improvements at this class of highways.

Frequency of Change Orders in Highway Construction Using Alternate Count-Data Modeling Methods

A common problem at state transportation agencies is the inability to complete projects within the original scope of work. Change orders, which are contractual documents issued to accommodate the additional work in a contract, are generally due to root causes such as design errors, unexpected site conditions, and weather conditions, and intermediate causes such as bidding characteristics. At the preaward phase of project management, an improved understanding of the factors that are associated with change orders will be of value and also can serve as a basis for taking steps to reduce concomitant contractual aberrations such as time delay and cost overruns. Recognizing that the occurrence of change orders is a count variable, this paper analyzes the frequency of change orders using a variety of count-modeling methods including the negative binomial, Poisson, zero-inflated negative binomial, and zero-inflated Poisson. Using 5 years of contract data from Indiana highway projects, appropriate models are estimated to assess the influence of project type, contract type, project duration, and project cost on the frequency of change orders.

Trade-Off Analysis for Multiobjective Optimization in Transportation Asset Management by Generating Pareto Frontiers Using Extreme Points Nondominated Sorting Genetic Algorithm II

Investment decision making in transportation asset management is typically characterized by a wide diversity of asset types for purposes of optimization at overall system level. To enhance investment analysis and decision making for these multiobjective problem types, the analysis of trade-offs associated with different performance measures can be illuminating and informative. This paper provides techniques for efficient trade-off analysis as part of multiobjective-optimization for transportation asset management. The multiobjective-optimization problem is first formulated by establishing the objectives expressed in terms of network-level performance measures underlying the analysis of trade-offs. Then, the Extreme Points Nondominated Sorting Genetic Algorithm II (NSGA II) technique, an improvement over traditional NSGA II, is applied to generate Pareto frontiers that illustrate the trade-offs. Using candidate projects from a varied range of asset types as a case study, the paper successfully conducts the trade-offs between performance objectives and cost, and then among the performance objectives. The paper also shows that Extreme Points NSGA II has a faster convergence speed and yields a distribution that is superior to the traditional NSGA II.