Best Practice

BEST PRACTICE:

F1−3: A+B and Incentive/Disincentive Clauses

DESCRIPTION:

• A+B bidding – The contractor is asked to factor in the estimated time for the job, along with the cost of the work.
• I/D – The contractor is assigned a cost value for time that rewards or costs him money during execution of the contract depending on how efficient the contractor's operations are.
• Disincentive only – In some cases the Michigan Department of Transportation (MDOT) will assign a disincentive cost to lane closures, and assess the contractor in 15−minute intervals. This type of contract provision is used to assure that certain lanes will be opened by the contractor to accommodate rush hour or weekend directional traffic patterns. On this type of clause, there is no incentive money awarded for opening a lane ahead of the rush hour; this is a disincentive only.

REASON(S) FOR ADOPTING:

MDOT wanted to minimize the time required to complete work thereby reducing the amount of traffic inconvenience. By utilizing the A+B technique along with an I/D clause, MDOT has been able to tap contractor ingenuity as to how to get the work done in the least time possible.

PRIMARY BENEFIT(S):

• A+B bidding – Reduced overall contract time, with resultant reduced motorist delay.
• I/D and Disincentive only – Reduced delay during critical high−traffic periods.

MOST APPLICABLE LOCATION(S)/PROJECT(S):

These particular techniques have been reserved for those projects in which the construction has a major impact on traffic. Generally these projects have been on major urban freeways.

RELATED BEST PRACTICE(S):
A+B Bidding with Incentive/Disincentive Clauses (Practice F1−2).

STATE(S) WHERE USED:

Michigan

SOURCE/CONTACT(S):

Tom Fudaly, FHWA Michigan Division Office
Phone: (517) 702−1831
E−mail: thomas.fudaly@dot.gov