In This Issue...


Innovation

Advancing Innovation
Sign of the Times?
Simple Truths About Tollways
Readers Weigh in on Public-Private Partnerships
ACPA Offers Updated Pavement Design Software
Publication Provides Insight on Surface Characteristics
Transportation News

Okay, we realize the term 'innovative contracting' sounds painfully obvious. After all, what other kind of contracting would be acceptable to agencies and roadbuilders?

The point is, however, that innovative contracting is an absolute must today as agencies stretch a tight supply of dollars to place and rehabilitate highway, roadway, and airfield pavements.

There's more to the story than simply making dollars go farther.

Today's contracting environment is also about stretching the imagination to find ways to mechanize, streamline, optimize, and otherwise return the highest value to stakeholders of all types.

Contracting began simply enough with agencies using relatively simple design methodologies and cost accounting practices.

Stories abound of individuals who would go out on a proverbial limb to recommend or advocate new processes, products, or innovative approaches.

So-called method specifications detailed every conceivable aspect of the road-building process. Although this took the guesswork out of bidding on projects for contractors, many argued it also inhibited or eliminated innovation.

In the late 1980's and early 90's, a paradigm shift began to occur as agencies and others started evaluating new ways to approach the project management and the bid-letting process. Agencies also sought to reduce the staff needed to oversee construction projects.

From this, a number of innovative contracting methods have evolved. While some methods have advanced in leaps, and others have moved at a crawl, the general trend is toward greater flexibility and optimization. For its part, the concrete pavement industry is also working to minimize costs through pavement optimization, while pursuing more innovative approaches on a breadth and depth of topics. Among those topics are pavement design; concrete mixtures; cataloging of features; and more.

This issue of CONCRETE PAVEMENT PROGRESS explores just a few of these methods that are allowing contractors and agencies to stretch the limits of imagination to advance both the science and art of concrete paving and rehabilitation. How is your agency or company applying innovative contracting? Click here to let us know. .................................— The Editors of CPP

The topic of pavement warranties is complex and has long been discussed by the public and private sectors alike.

A warranty is essentially a performance-based contract that guarantees the integrity of a product
—in this case, a pavement
—and places the responsibility of replacing or correcting defects on the contractor, according to the Transporation Research Board (TRB).

The TRB announced this definition on its website in describing a research project titled, "Guidelines for the Use of Highway Pavement Warranties."

This project, NCHRP-10-68, aimed at providing industry and agencies with guidelines for using highway pavement warranties, is slated for completion in March 2008.

"Under a pavement-warranty specification, quality is measured by the actual performance of the pavement as opposed to the properties of the pavement materials and methods of construction," according to the TRB's website. "Pavement warranties require the construction contractor to guarantee the postconstruction performance of the pavement. The shifting of postconstruction performance risk from the state highway agency to the contractor is perceived to reduce premature pavement failures, reduce costs, and increase pavement quality."

"With this shift, it is important to bear in mind what warranties are and what they are not," says Gerald F. Voigt, P.E., President & CEO of the American Concrete Pavement Association (ACPA).

"Warranties are a mechanism to transfer risk; a substitute for construction inspection; and a marketing tool to the public.

"They are not a substitute for the lack of highway resources to maintain the road system or an incentive to foster innovation," he adds.

The industry has long contended that warranties will produce a shift to fewer and bigger contractors and may upset the competitiveness of contractors with small bond capacity. Because of these dramatic impacts, agencies should only warrant what is in the contractors' control—materials and workmanship, Voigt says. "If an agency considers a performance warranty, they then must relinquish control of the design to the contractor."

Historical Perspective
In the past 15 years, the use of pavement warranties has gained more interest in the United States, according to the Federal Highway Administration's (FHWA's) website on Pavements. Stemming from successes reported in Europe, warranties in the United States have been used by some 35 states, "which have varying degrees of experience with some form of warranty provisions on the Federal-aid highway projects," says the FHWA.

In 1995, FHWA announced an Interim Final Rule (IFR) for warranties for projects on the National Highway System, eliminating the restriction on the general use of warranties. The IFR states that "warranty provisions shall be for a specific construction product or feature and routine maintenance items are still not eligible." The IFR also prohibits warranties for items not within the control of contractors. The provisions of the IFR were adopted as a final rule in April 1996, according the FHWA's website on pavement warranties.

Looking Ahead
The FHWA presently is developing pilot workshops and offering resources for state agencies, contractors, and bond holders who have an interest in implementing warranties.

Industry organizations, including ACPA, have participated at the invitation of FHWA to provide perspectives and ensure the concerns of all involved are taken into consideration.

ACPA also is currently working on developing information specifically to assist its members and provide guidance on projects that may include warranty language.

"The future of contracting methods might not be predictable at this point," Voigt said. "However, one thing is certain, and that is that contracting and warranties will continue to evolve as accountability increasingly falls to the contractor."

For additional information, contact ACPA by e-mail or phone at 847-966-2272.

As the nation moves closer to the expiration of the Federal-aid highway program, the question on many minds is how will the nation pay for highways and roadway construction, maintenance, and rehabilitation?

One funding mechanism being discussed is the use of public-private partnerships (PPP's), and within those ventures, the greater use of tollways as a viable funding mechanism.

As is true among a great number of transportation experts, ACPA's view is that PPP's are not the only answer to the question before us, but also that they should not be dismissed out of hand.

Here's why: From 1990 to 2004, vehicle travel on the Interstate highway system increased by an extraordinary 51%, while lane capacity increased by just 6%. Presently, Federal and state transportation revenues are insufficient to preserve the system, let alone to add significant capacity. There are many predictions and opinions about the Highway Trust Fund, but one thing is a certainty: If left alone on its present course, it will be depleted by the end of 2009.

For agencies and other stakeholders that may be considering toll roads, the choice of paving materials is extremely important, because the pavements can make the difference between a profitable venture versus one that loses money.

Cost Risk Initial costs of any pavement system can be calculated with relatively easy mathematics, but future maintenance and rehabilitation costs, are more difficult to predict.
In terms of initial costs, the Producer Price Index (PPI), provides a solid benchmark against which to evaluate changes in materials costs over time. Assuming a baseline figure of 100 in 1960, the PPI for paving materials since than has shown some dramatic increases (Fig. 1). Asphalt paving materials have shown a more than 12-fold price increase, while concrete is about half
that.		Figure 1—Producer price index shows dramatic differences in asphalt versus concrete prices since 1960.
The volatility of prices can be measured by the percent change in PPI from month to month (Fig. 2). During the past 50 years, concrete has experienced a monthly change in PPI exceeding 5% only once, while asphalt has experienced changes in excess of 5% a whopping 22 times. In fact, asphalt has exceeded 10% from one month to the next 5 times.
Pavement material might be a small portion of total		Figure 2—Producer price index shows dramatic month-to-month increases in asphalt versus concrete prices since 1960.
construction cost, it is the major driver of revenues. If the pavement is in an unacceptable condition, it has to be repaired or rehabilitated (thereby increasing expenses). But there's a hidden variable, because a toll road can result in drivers finding alternative routes, and thereby, decreasing revenues.

More to the point, the choice of pavements impacts three basic risk components: cost/financial risk, performance risk, and traffic risk.

Concrete pavements, because of their durability, typically require only two repairs and one rehabilitation effort in a 50 year period. In this same period, asphalt may require about 12 major repair projects and four total rehabilitation efforts. Because there are fewer expenses and potentially fewer revenue losses over the course of its life, concrete pavements will have a higher return on investment to the PPP venture than asphalt pavements.

Turning to the effects this may have on the debt instruments used to fund the PPP project, the asphalt may have to undergo two complete rehabilitations during a 30-year bond. This could, of course, affect the bond-holder's ability to repay the debt, or at a minimum, increase the financial liability of the project overall.

Unlike conventionally-funded roadways, toll roads also have traffic risk. As noted above, if the road use declines, revenues will decline as well.

In a quick opinion poll taken by CONCRETE PAVEMENT PROGRESS recently, fully two-thirds said public-private partnerships may hold the key for funding highway projects.

According to one respondent: "This is the only way to tap into a large new source of funding.

"The PPP model seems capable of raising larger sums than state toll agency model.

Still another respondent said: "While the number of projects may be small, the investment and cost would be large for applicable projects. The grim reality is that the days of getting 80% match to fall from the sky for mega-projects are gone. A mega-project in today's world will have to include many sources and partners to make projects go."

One respondent cautioned that, although they have merit, PPP’s should be regulated: "PPP's follow typical free market concepts wherein private entities willing to invest or take risks can profit. However, that being said, there should be some form of regulation to ensure that the public is protected."

Most of the respondents agreed PPP’s are not right for all applications, although four of the 18 respondents said they are appropriate for virtually all highway projects.

Said one: "They aren't needed everywhere, as some would have you believe. In order for the private sector to be involved, there has to be sufficient revenues available through tolling mechanisms to justify investment in proposed projects—which means congested roads are the best candidates for PPP's."

Another respondent said PPP’s and alternative funding overall will require some educating taxpayers: "Alternative funding methods can work, but require educating the tax-paying public regarding the substantial needs of the system and demonstrating how traditional funding will no longer provide the level of service they have come to expect. Short of completely overhauling the management methods of the Highway Trust Fund and a sharp increase in the gas tax, the traveling public is going to have to embrace alternative funding, of which PPP's play an important part."

Fifty percent the respondents said their companies or agencies have prior experience with PPP’s, while 6.3% said they were planning one soon. Some 37.5% if the respondents were from state DOT’s, while another 6.3 were from counties or municipalities. About 31% were from consulting firms, while 25% of the respondents were contractors or cement company officials.

CONCRETE PAVEMENT PROGRESS says thanks to everyone who took the time to participate in our quick poll.

ACPA has delivered a free, online version of its popular StreetPave design software, which can be used for both roadway and highway pavement design.
The online version includes many of the same features as the full original version of the software,

The easy-to-use online version allows designer to use the software by following five quick steps:

1. Choose design/analysis type
2. Enter project level design constraints/requirements.
3. Input traffic characteristics.
4. Input pavement properties.
5. Run analysis and view results.

The full version of StreetPave includes a number of additional features that allow designers to optimize concrete pavement thicknesses for municipal, county, and state highways and roadways.

It includes an asphalt cross-section design process (based on the Asphalt Institute method) to create an equivalent asphalt design for the load carrying capacity requirement. A “Life Cycle Cost Analysis” module allows detailed cost/benefit analysis. StreetPave is compatible with Windows 95, 98, NT, 2000, XP compatible. For more information, visit the ACPA bookstore at www.pavement.com/bookstore. (ACPA members also may access the bookstore by logging into the members' only portion of the website.)

For users of the full version of StreetPave, ACPA also is offering a free patch to upgrade the original version of StreetPave to Version 1.2. The upgrade includes enhancements to the dowel bar recommendation feature, additions to the life cycle cost module (inputs and reports), and a new interface for inputting and determining pavement characteristics.

ACPA has posted details about the patch, along with specific instructions for downloading and installing it. Click here for a Word document containing details about the patch. Then, click here to download and install the file.

StreetPave 1.2 and its online version are the latest in thickness design technology for streets and local road pavements. This software utilizes new engineering analyses to produce optimized concrete pavement thicknesses for city, municipal, county, and state roadways.

For more information on the online version or the patch upgrade, contact Andy Gieraltowski at 847-966-2272. For more information on StreetPave, contact Scott Haislip at 847-966-2272.

The latest ACPA R&T Update provides details about how grinding and grooving affects tire/road noise.

"Caltrans Diamond Grooving Experiment — 38 Years Later" provides results from ACPA’s 2007 On Board Sound Intensity (OBSI) testing of a 1969 California grooving experiment.

ACPA's 2007 OBSI testing suggests that diamond grooving is not effective from an acoustic standpoint. The publication, however, recounts that grooving has never been applifed for noise mitigation. Rather grooving is still an effective tool for lateral stability and improved friction without sacrificing noise qualities.

Click here to download this free update. Click here to download more R&T Updates.

Questions? Contact Robert Rodden at 847-966-2272.

International Society Calls for Papers ... In advance of the 9th International Conference on Concrete Pavements, the International Society for Concrete Pavements is calling for papers and exhibitors.

Suggested paper topics include topics on concrete pavement innovations, including: concrete pavement analysis, design, and construction; concrete materials and pavement performance; joint performance; and concrete overlays. Organizers are also encouraging coverage of post-construction evaluation; long-term performance; ecological issues; economics; and emerging technologies.

Letters of intent for paper submissions are due September 4.Click here to download a submission form and a complete