USE OF WARRANTIES ON IN-SERVICE PERFORMANCE FOR ROADWAY CONSTRUCTION PROJECTS

The objective of this project is to investigate the potential benefits of using in-service warranties on roadway construction projects in Montana. Following this approach to highway contracting, the contract specifications are expressed in terms of the performance of the roadway after it is placed into service, rather than in terms of the construction methods to be used or the final properties to be achieved in building the facility. Perceived benefits of the in-service warranty approach include that a) the contractor is directly motivated to provide a facility that meets the needs of the motoring public (i.e., a smooth, safe roadway) rather than simply to meet prescribed construction standards, and b) competitive market forces will result in the design and construction of innovative and efficient roadway projects. This approach to highway construction contracting differs significantly from the approach currently used in Montana, and thus the results of using this approach are uncertain. This study has been divided into two phases. Phase I consists of a) identifying the critical issues that must be addressed if in-service warranties are to be used, b) reviewing the manner in which these contracts have been implemented in Europe and across the U.S., c) determining current perceptions in Montana regarding these contracts, and d) formulating recommendations for demonstration in-service warranty projects to be awarded in Montana. Phase II of the project involves a) developing a formal in-service warranty contract instrument based on the recommendations from Phase I, b) selecting demonstration projects to be constructed using these contracts, c) monitoring their construction and in-service performance, and d) doing a cost-to-benefit analysis of the projects. Phase I of this study has been completed and the results are presented in this report. Issues that need to be addressed in developing warranty contracts on in-service roadway performance include the aspects of the roadway behavior to be warranted, the duration of the warranty, the payment terms, the bid procedure, etc. Examples of how these issues can be addressed are available from Europe, where the use of in-service warranties appears to be commonplace, and the U.S., where several state departments of transportation have recently researched and awarded demonstration warranty projects. The Montana Department of Transportation and the Montana construction community and bonding agents have a variety of concerns regarding the use of in-service warranties on roadway construction projects. Many of these concerns can only be definitively answered by awarding and studying demonstration warranty projects. The first conclusion of Phase I is that the demonstration projects should be reconstruction jobs, on moderately traveled highways. Second, the projects should be warranted with respect to ride, rutting, cracking, and skid resistance for a period of 5 to 10 years. Contract awards should be based on securing the best technical quality for the lowest price. Finally, a maintenance bond should be required.