Long-term Stabilization of Disturbed Slopes Resulting from Construction Operations (TPD1803040)

The distinction between these two basic types of warranties is important. Materials and workmanship warranties hold the contractor responsible for “meeting the specs” as they apply to the quality of the materials and the way in which those materials are incorporated into the project. Performance warranties go well beyond that, shifting the ultimate responsibility for the project and how it performs (notwithstanding that its materials and methods may have been fully compliant) from the owner (government agency in the case of highway contracting) to the private contractor. The test of time has shown several challenges in the application of that idea to the real world of construction contracting.

Advantages and Limitations – Initial Expectations

The early literature on warranties set forth both prospective advantages and potential limitations in their use (Johnson 1999, Anderson and Russell 2001). Among the prospective advantages were the following:

• Increased product quality.
• Lower life-cycle cost.
• Shifting risk from the owner to the contractor.
• Increased contractor involvement in planning and execution, leading to fewer claims and disputes, better bids, and reduced risk of liability losses for everyone.
• Development of better testing equipment and construction techniques
• Predominance of larger, qualified, stable firms to do all tasks for major transportation projects, lessening the risk to both owners and sureties for large projects.
• Reduction in agency staff.

Among the “concerns” were the following:

• Potential higher life-cycle costs despite maintenance cost savings.
• Enforcement over extended periods.
• Selection of appropriate warranty periods.
• Obtaining recourse in case of contractor business failure.
• Uncertainty of whether surety companies will provide long-term bonding guarantees.
• Elimination of small or minority contractors unable to acquire bonding.

Types of Highway Components Subject to Warranty

Gallivan (2009) reported that, by 2006, thirty-four U.S. states had used some kind of warranty specifications in their highway contracts. The most prevalent use was for hot mix asphalt pavements; twenty-two states had used them for over 700 such projects. The following list was compiled from studies by Anderson et al. (2011), Bayraktar et al. (2006a), Johnson (2008), Markow (2010), Russell et al. (1999), and Scott (n.d.). The list identifies the wide variety of highway components covered by some kind of warranty in at least one project up to about

The U.S. Army Corps of Engineers (2012) uses an Army Reserve Construction Warranty Implementation Plan for its Louisville District that makes the contractor responsible for providing “a minimum One Year Warranty Period of all equipment, material, design furnished, or workmanship or as proposed by the contractor as a betterment.” The plan involves conferences, training, inspections, identification tags, an ombudsman, and other requirements. It even includes a furniture warranty reference sheet, giving warranty durations, by manufacturer, for several types of furniture.

State Experience and Evaluations

In an earlier section, we noted that states’ experiences with highway construction warranties have been extensively studied and evaluated. In this section, we summarize some of those findings. The impetus for these studies was the rapid increase in warranty use in the late 1990s and into the early 21st century. One statistic is representative: Russell et al. (1999) reported that the number of warranty project completions in U.S. highway construction rose from 10 in 1995 to 119 in 1997.

Experience with highway construction warranties has resulted in mixed success. We shall describe a representative sampling of the many reports, with the reminder that there is a dearth of reports from the very recent past, since the decline in popularity of this approach to construction has made writing about it less popular. To start, the following general comment by Sees et al. (2009) seems appropriate: “These projects have met with varying degrees of success, causing some states to broaden the use of warranties, whereas others have abandoned them completely.”

Wisconsin’s early experience was positive. A major reconstruction project of a rural highway was one example of a result considered positive. The project required a 5-year performance warranty (Udelhofen 2006). Anderson et al. (2005/2006) reported the following at about the same time: “WisDOT believes that warranty contracting is a positive direction for both contractors and themselves.” Later studies concluded that non-warranted and warranted hot-mix asphalt pavements had approximately equal total cost, pavement distress, and anticipated rehabilitation requirements. The staff time was greater for warranted projects, but the ride quality was better for warranted pavements (Scott et al. 2014).

In 2012, the Wisconsin DOT suspended the use of warranties until it was able to “revise the current specification to address concerns …” (Scott et al. 2014). Apparently, this was the death knell for the performance warranty program in Wisconsin, because it no longer exists.

Bonding was a major issue. Warranties began to be used on inappropriate projects, such as those over which the contractor could not have control. Contracting companies’ attitudes changed, and they became less cooperative. Contention arose between the agency and its contractors over condition assessment methods and the enforcement of warranty repair work. The result—no more performance warranty projects in Wisconsin, and none likely in the foreseeable future (Whited 2017).

In Colorado, as reported by Shuler et al. (2014), experience with warranty and non- warranty projects led to the conclusion that there was no significant difference in competition, performance, or cost between the two types. Further, no tangible benefit was apparent from shifting the risks and responsibilities between contractor and agency. Thus, at the time of the study, “there was no strong cost-benefit evidence to suggest that either continuation or stoppage of the 3-year warranty program will be beneficial.” Scott et al. (2014) reported a similar conclusion from a 2007 report: “the implementation of short term warranties of HMA [hot mix asphalt] was not a cost-effective tool for the Colorado DOT.”

Goldbaum (2006, 2012, 2017), who has tracked the cost aspects of warranty highway contracting in Colorado over many years, described a recent study in which ten pairs of warranted and non-warranted projects were compared after ten years of service life. His primary conclusion mirrors those from earlier investigations: “… the implementation of short-term warranties of HMA is currently not a cost-effective tool for CDOT to implement” (Goldbaum 2012). An even later Goldbaum study on a hot mix asphalt and a Portland cement concrete project reported that neither was cost effective (Goldbaum 2017).

Michigan has been at the forefront of warranty contracting for highways. Its Department of Transportation claims to be the most experienced agency, having completed over 1000 warranty projects from 1997 to 2006 (Michigan Department of Transportation 2015). A 2002 project was threatened with a lawsuit (later withdrawn) by four trade organizations concerned with some of the warranty provisions (Czurak 2002). An analyst for the Michigan House Fiscal Agency provided a prophetic caution regarding the limitations of such an approach:

If MDOT wishes to expand the use of performance warranties, it will have to allow contractors a say in design decisions. As long as MDOT continues to do the design work, specifies the material properties, and prescribes construction specifications, it is unlikely that contractors would be willing to warrant the actual performance of the road. In effect, the contractors would be asked to warrant something they had no control over. (Hamilton 2001)

Michigan’s early experience was positive. Bid prices did not increase for warranty projects. The agency saved money by having contractors perform repair work within their contracts, and had further cost savings through reduction in numbers of agency personnel (Anderson et al. 2005/2006).

Indiana’s experience has been more positive than that of some states, although the warranty program was recently suspended after an attempt to increase the warranty period to 10 years (McDaniel et al. 2017). A 2007 report on Indiana’s pavement warranty program expressed a “general air of guarded optimism” (Singh et al. 2007). That optimism was based on comparatively better performance over non-warranty projects and better cost effectiveness in the long term. A more recent study (Sadeghi et al. 2016) offered similar results and estimated service lives 10 to 14 years longer, on average, for warranted asphalt pavement projects, compared with similar non-warranted projects.

Other evaluations led to similarly mixed results. In Mississippi, a statistical analysis of both asphalt and Portland cement concrete pavement projects completed between 2003 and 2010 (Qi et al. 0213) showed that the deterioration rate for warranted projects was slower and the performance of warranted pavements was superior for equal lengths of service. On that basis, the report suggests, rather tentatively, “it could be concluded that the pavement warranty program in Mississippi can effectively improve the pavement performance for the state.” Zlatkovic et al. (2015) discussed the disadvantages of highway pavement marking warranties in Utah, including higher initial costs, a more complex bidding process, and difficulties in risk assessments; however, they concluded that advantages identified in their study outweighed the disadvantages.

Alaska’s experience with actual true performance warranties is very limited. Except for maintenance warranties on various electrical products and pavement markings, under which the supplier is responsible for “performance” of such systems for a stated period, the only other experience has been the use of product performance warranties for dust palliatives, on a 3-year trial basis, for rural airport gravel runway dust control. We append to this report a case study about that effort (Appendix 2.E), including the rationale for starting the trial program, lessons learned, and reasons why the program was terminated.

Of all the experience reported above and elsewhere, only a few projects have utilized long-term (greater than, say, 10 years) performance warranties (Scott et al. n.d.). Bolling (2012) reported that, of more than 2000 highway warranty projects in the U.S. highway system, most utilized materials and workmanship warranties, while about 100 utilized short-term performance warranties, leaving a “handful” in the long-term category. All the long-term performance warranty projects, and most of those in the short-term category, wherein the contractor was responsible for the performance of the work put in place (such as pavement, rather than purchased products such as traffic controllers or pavement striping), have been built using design-build or public private partnership contracting methods. Contractors are not willing to guarantee the performance of projects in whose designs they have not been involved.

At this point in the report, with respect to our initial hypothesis that long-term or even short-term warranty contracts might be appropriate for maintaining stabilized slopes over time, it could be concluded that little experience is available to evaluate the practicality of that approach and that evaluations made have set forth mixed results.

Five years ago, the FHWA was still encouraging the use of warranties (Federal Highway Administration 2012). Its guidance paper, which offered ideas to assist states in managing their warranty programs, listed some states that were still utilizing highway construction warranties, whether materials and workmanship or short-term or long-term performance types. The paper made it clear that “(t)he Federal Highway Administration (FHWA) intends to continue supporting and encouraging the use of pavement warranties throughout the United States.” As we shall see, much has changed in the years since that statement was made.

Construction Community Attitudes about Construction Warranties and Maintenance Management — Interview Results

To ascertain the attitudes of Alaska’s construction community and others about construction warranty-related issues and the way these issues might relate to the maintenance of stabilized slopes and other aspects of roadside maintenance, we interviewed thirteen contractors, engineers, and engineering managers. A list of those interviewees is contained in Appendix B, and a summary of warranty examples discussed in the interviews is included as Appendix C.

We asked about experience with construction warranties, the potential for including warranty provisions in specifications related to maintaining stabilized slopes, the use of “establishment periods” in specifications related to roadside vegetation, experience with or interest in various contractual/management approaches to maintenance of roadside vegetation including stabilized slopes, and other comments or suggestions. Nearly all of the responses relate to highway or other horizontal construction. The following comments are summaries of the responses to each of these topics:

Experience with Construction Warranties

Appendix D contains short descriptions of warranty uses on projects that were discussed during the interviews.

Nearly every construction contract has some materials and workmanship warranty provisions. Many contractors have had no “warranty issues” with these types of warranties over many years of contracting experience.

Whatever the type of warranty, many owners have difficulty understanding the difference between maintenance and warranty work. Owners are expected to keep up on maintenance, but they often neglect it. The customer owner on a military performance warranty project to install a boiler tended to think it was an O&M contract, and frequently requested routine operation or maintenance that was really a customer owner’s responsibility. The contract required a response to warranty calls within a given period or the contractor risked forfeiture of retainage, so the contractor responded to all calls, even if the ultimate resolution was for the customer owner to perform routine maintenance per procedure.

Every job should require a good maintenance manual that indicates what the owner must do for maintenance and should require maintenance training of the owner’s personnel. This, in part, is for contractors’ protection, so they are not called back to “fix” every issue that could have been avoided (or made less bad) by proper maintenance.

Contractors are generally not in favor of performance warranties. Such contracts tend to reduce competition because fewer firms are eligible for the required bonding, especially smaller firms. In a contract that includes subcontractors, such as landscaping on slopes, the warranty provision would apply to the subcontractor; but the subcontractor does not want to take on that responsibility.

It is difficult to identify the cause(s) of construction failures and thus decide whether the contractor is at fault for poor performance. Higher than expected traffic counts and poor maintenance by DOT forces can lead to failures that are not the contractor’s fault. Performance standards are often vague and difficult to establish, interpret, and enforce.

In some cases, performance warranties, even though included in the contract, are not enforced because of the difficulty of determining the cause/fault.

Conditions that can influence performance during the performance period can include weather, other seasonality issues, wildfires, wayward ATVs, accidents, and other hard uses. Those causes might be stated as exceptions, but they may be difficult to interpret and enforce.

Highway elements for which performance warranties have been used (pavements, electrical, pavement markings) have something in common: they are typically not subject to weather influences and thus would not need weather as an exception in deciding if performance is satisfactory.

The availability of bonding for performance-warranty contracts is a major issue. Sureties do not like bonds that go much beyond 12 months (24-month maximum). Leaving the contract open during the performance warranty period means bonding is still in effect.

There has been little to no experience with performance warranty construction on Alaska DOT&PF projects. The attitude is that the contractor did not have responsibility for the design, and therefore cannot be responsible for its performance. Other issues with DOT&PF projects and performance warranties include the difficulty or impossibility of keeping the bond open for 5 or so years, and hard to determine causes of failure. A challenge is how to keep the contract open just for the warranty phase, and the extent to which FHWA would participate in the maintenance phase.

Performance warranties are more appropriate for design-build projects; there has been little experience with these in the DOT&PF Northern Region.

Stated another way, performance warranties can be successful if all parties are in it as one entity. Risk must be carried out within the single-entity team, which has an advantage to the owner by not being involved in this part of risk sharing. The risk sharing must be spelled out in the team agreement.

An advantage of a performance warranty might be a reduction in the number of state agency personnel needed on a project.

Use of Warranties for Roadside Vegetation Including Stabilized Slopes

With one exception, there was no experience with, nor support for, the use of performance warranties for roadside vegetation including stabilized slopes. For highway projects in Alaska, everything about slope stability is designed and specified by DOT&PF, thus making such warranties inappropriate. For vegetation design, especially for stabilized slopes, the design may not be fully appropriate for actual conditions; expecting the contractor to take responsibility for performance assigns undue risk to the contractor. As stated in the previous section, the landscape subcontractor has little interest in taking responsibility for warranty work.

In the case of vegetated slopes, performance is highly dependent on weather and other similar conditions; it is difficult to determine an equitable sharing of risk. Other slope stabilization methods rely more on workmanship, thus making it somewhat easier to evaluate risk.

Since there are many variables outside the contractor’s control, it is difficult to prove that the contractor was responsible for poor performance.

Performance warranty provisions for vegetated slopes might work in the case of a design- build contract.

The one exception mentioned in one interview was the City of Anchorage. In the case of seeding and other plantings, there is a 1-year performance-type warranty. The contractor is paid 30% upon completion of the seeding/planting. If satisfactory after 1 year, the 70% balance is paid. Otherwise, reseeding and/or re-planting is required.

Establishment Periods

The Alaska DOT&PF Northern Region uses a special provision related to seeding (Section 618): establishment period is that length of time needed to achieve 70% cover, rather than a specified length of time. The rationale is that insufficient control is given to the contractor to warrant performance. The contract is kept open until seeding/planting is accepted; everything else can be accepted.

Most interviewees believe that the Alaska DOT&PF 1-year-establishment period (for plantings statewide and seeding, except in the Northern Region) is reasonable. Comments and cautions included the following:

• Reasonable, provided planting is done at the proper time of year.

• The intent is to get through the first growing season.

• Maybe the 1 year could be made more flexible, making it project-by-project.

• “Employ all possible means…” could be interpreted to be very severe on contractor (greenhouse? Heat and light?)
• Reasonable except for the pitfalls – stacking snow, grader trims shoulder, four wheelers; dry weather.
• Extending beyond 1 year would have to include bonding considerations. Would a bond be available?

One approach might be just to stabilize the slope in the fall and then seed it in the spring (maybe under a separate contract).

With regard to bonding, there were two related ideas: (1) If seeding is left until the next spring, perhaps all the other work could be closed and bond coverage carried just for the remaining seeding; (2) bond coverage might be extended just for vegetation during the establishment period.

One approach might be to make all of the vegetation, including the establishment period, a separate contract. Thus, the main construction contract could be closed out earlier.

The Washington DOT interviewee reported that Washington uses establishment periods of up to 3 years, but that 7 to 10 years may be needed in some cases.

Maintenance Management Approaches

The only real options for highway maintenance, including vegetation, are the following:

• Extended construction contract, over a several-year warranty period – discussed at length in the first section above.
  • State maintenance – as happens now in Alaska, except in a few municipalities.

• Separate maintenance contract (private or an agreement with the local government).

This section deals with the third option and focuses on private maintenance contracting.

An out-of-state interviewee noted that, across the country, most such work is done in- house, but there is a trend toward more contracted-out maintenance work (with some resistance from M&O departments, whose role becomes diminished).

The varying opinions on this issue were not surprising. Public agency personnel tend to prefer in-house (DOT&PF) maintenance forces, and private contractors suggest that the private sector might be well suited to perform such maintenance in some cases.

The following are comments we received on the topic.

• Alaska DOT&PF Maintenance and Operations typically does this work cheaper, and does an excellent job. Attitudes might be different if M&O were not so good. Local DOT&PF M&O personnel know best; are motivated and close to the situation; have pride in their work; would likely resent an outside contractor. Thus, DOT&PF managers tend not to favor private contracts for this task.
• There would have to be a long-term fiscal plan for contracting roadway vegetation management. The contractor may have to acquire special equipment, and it would be unfair to tie the contractor to a 1-year-only contract. It would be inefficient to have a maintenance contractor for vegetation for several locations far apart from each other, when DOT&PF maintenance stations can handle all maintenance including vegetation.
• A maintenance contract likely would still require bonding. The duration of the contract might preclude bonding, but there could be renewable bonds, each of which was for, say, 2 years.

 

On the other hand, several contractors believe that privatizing such work is a good idea, with one comment that it is unfortunate that Davis-Bacon makes wages for this kind of work so high. Many contractors would be interested. A suggested approach is a term contract to take care of several locations; a payment bond covering seed, fertilizer, etc., would probably have to be purchased by the contractor.

A maintenance contract separate from construction might work, especially if it involves locals who have authority and interest in doing a good job of maintenance. Mechanisms do exist, under such programs as LRSA (Local Road Service Areas), which allow local “participation in government.”

Alaska DOT&PF uses maintenance contracts for rural airports; the contractor must maintain vegetation control within a certain distance of the runway edge lights.
A contractor reported having a maintenance contract with Alyeska Pipeline Service Company and suggested contractors would be interested in similar arrangements with DOT&PF.

Contractors and DOT&PF personnel observed that DOT&PF M&O does not do much to maintain remote vegetated slopes. After the end of the establishment period, M&O does not work toward long-term establishment (seeding, fertilizer, watering).
There are similarities between vegetation management and snow removal with respect to contracting out or doing in-house. Several interviewees reminded us that such private contracts

Current Warranty Status in U.S. Construction

In this half of our report, we have traced the history of warranties in U.S. highway construction, listed anticipated advantages and limitations and the components that have been warrantied, reported some evaluation results, and summarized the current attitudes toward warranties and the management of roadside maintenance as expressed by a representative group in the Alaska construction community. It is important to try to ascertain the status of warranty use, because some major trends can be identified during the past 5 years or so.

We ascertain the status of warranty use by reviewing some representative highway construction specifications, looking at a few projects currently underway, reporting the surety industry’s current position on warranty contracting, and summarizing information from two experts in the field who were once actively involved in warranty contracting with the FHWA.

Specification Review

Due to declining emphasis at the federal level, and in many states, on performance warranties for highway construction, recent literature contains little on the subject. Furthermore, even those publications dated since 2016 rely on data considerably older than the publication date. Thus, it seemed important to conduct a review of representative state highway construction specifications to learn the extent to which contracts contain any type of warranty provisions.

We selected 14 states, plus British Columbia. Most were known to have had considerable interest in warranties during the heyday of highway construction warranties. The documents consulted are listed in Appendix 2.A. The results of the review are included in Table 2.1.

*  See Appendix E, “Bonding Arizona’s South Mountain Freeway” as part of this report

In the case of various equipment or parts, such as luminaires or traffic signals, we have chosen to label the “manufacturer’s warranty” as a performance warranty, our rationale being that the manufacturer guarantees the performance of that equipment or part. Such a guarantee might be labeled a material warranty, although the specification is typically for performance characteristics, rather than a “recipe” for how the element must be made.

In Table 2.1, performance warranties of the type that make the contractor, not the “manufacturer,” responsible for repairs in the case of failure of performance (the classic or traditional sense in which “performance” is used) are limited in the following listing:

Florida

• Value-added asphalt pavement
• Value-added Portland cement concrete pavement Indiana
  • Micro-surface course
  • Ultra-thin bonded wearing course
  • Seeding and sodding
• Mississippi
• • All work

Three other comments are noteworthy regarding the data in Table 2.1. First, should those states with pavement marking “performance warranties” be in the preceding short list? We left them off, because the supplier/manufacturer is typically held responsible for performance. They could be included, if we make the general contractor responsible. Second, Wisconsin now uses the term “proving period,” rather than warranty period, for its pavement markings, in line with that state’s much reduced attraction to the whole warranty concept. Finally, only Alaska, Indiana, and British Columbia have anything about seeding/sodding that uses the term warranty, although the establishment periods in other specs assure some degree of performance guarantee during this period.

Two Current Projects

In Appendix E, we give a thumbnail sketch of a large project currently underway in Arizona—the design, construction, and maintenance of the Phoenix-area South Mountain Freeway. This P3 (Public-Private Partnership) project utilizes a single entity consortium for the entire design, construction, and 30-year maintenance period. The maintenance part of the contract negates the need for a performance warranty, but some items are not in the maintenance agreement. Those items will be covered by a material and workmanship warranty.

The other example is a project familiar to many Alaskans: Seattle’s Alaskan Way Viaduct Bored Tunnel. Awarded in December 2010 to a consortium called Seattle Tunnel Partners, this design-build project is currently (as of October 1, 2017) scheduled for substantial completion in February 2019. Its accepted bid price was $1.09 billion; the current price is $2.10 billion. The contract’s design-build character makes it suitable for the use of warranties, and they are included. We quote the specification section related to project warranties in its entirety (Washington State Department of Transportation 2010).

22.1.1   Project Warranties

Design-Builder warrants that:

(a)   all design Work performed pursuant to the Contract Documents shall conform to all professional engineering principles generally accepted as standards of the industry in the State;

(b)   the Project shall be free of defects, including design defects, deficiencies, errors and omissions, except to the extent that such defects are inherent in prescriptive specifications included in the Technical Requirements;

(c)   materials and equipment incorporated into the Work shall be of good quality and, when installed, shall be new;

(d)   Equipment provided by Design-Builder shall be of modern design and in good working condition;

(e)   the Work shall meet all of the requirements of the Contract Documents;

(f)  the specifications and/or drawings selected or prepared for use during construction are appropriate for their intended use; and

(g)   the Project shall be fit for use for the intended function.

“Fit for use for the intended function” may be a bit vague, but it sounds close to the performance warranties we have considered herein. The contract specifies a 2-year warranty period for “the tunnel structure, the tunnel approach structure and all systems, equipment, fixtures and other appurtenances of the tunnel structure and tunnel approach structure.” All other work is warranted until the later of (1) one year from the physical completion date, or (2) the final completion date.

These two examples are symbolic of the notion that the traditional design-bid-build approach to construction contracting, wherein the eventual contractor is not part of the design process, is poorly suited to the use of any sort of performance warranties.

The Matter of Bonding

The reluctance of the surety industry to provide long-term bonding for construction contracts, and the resulting difficulty that contractors experience in acquiring such, was noted previously. That difficulty is a major element in the situation today.

On warranty projects, state DOTs typically require long-term maintenance bonds, also called warranty bonds. Since the contractor is responsible for “performance” of the project during the warranty period, the bonding company is expected to guarantee the contractor’s operational and financial viability during that period.

As stated by Bayraktar et al. (2006b), “The main difficulty for sureties is predicting the contractor’s financial position in the future. According to the underwriters, regardless of the current financial strength of the client, predicting its position beyond two years becomes a game of Russian roulette; and as the duration of the warranty period increases, the stakes in the Russian roulette game increase accordingly.”

The surety industry has made clear its position on this matter. From Canada, we find the following summary of the association’s position: “…The Surety Association of Canada (SAC) believes that it is inappropriate to impose extended warranty obligations upon both a contractor and a surety … will continue to suggest to the contract surety community that while surety bonds provide the best protection against contractor default, they are neither priced nor designed to provide a solution to long-term warranty requirements (Surety Association of Canada/Association Canadienne de Caution. 2014).

The Surety & Fidelity Association of America (2017), after stating concerns about reduced competition, increased risks and increased costs, offers a somewhat more hopeful attitude, as follows:

The SFAA believes that a workable bond requirement can be established which provides effective protection to state DOTs, presents a reasonable risk to the sureties and enhances competition among responsible contractors. SFAA recommends that the warranty be limited to three years. With adequate design, engineering and inspection this length of time protects the owner but does not subject a contracting company to financial hardship for defects which are out of its control…

SFAA invites dialogue with contractors and state DOTs to develop a bond requirement that would be more widely available than a long-term warranty bond and would enhance competition.

Even in this statement, however, there is opposition to bonding long-term warranty projects.

Current Status of U.S. Warranty Contracting – Reports from Two Experts

To conclude our investigation of the current status of warranty use in U.S. highway construction contracts, we contacted two experts in the field. Both have long-term associations with the Federal Highway Administration (FHWA) and in that role have worked with Alaska DOT&PF personnel. Victor “Lee” Gallivan has retired from FHWA and now works as a consultant in Indiana. Dennis Dvorak is still employed by the agency. Our information came from an extensive and helpful series of e-mail exchanges (Gallivan 2017, Dvorak 2017). The following summarizes those exchanges:

The decline in interest in highway construction warranties is real. Except for P3 projects, there is little current interest. Probably fewer than a dozen states are using them. Except for P3 and design-build projects, the only states using performance warranties are those required to do so by legislation. A large number of pavement preservation projects do use materials and workmanship warranties, but they are mainly for materials, not workmanship. The reduction in interest in warranties is due to many factors, including:

• Reduction in service life of projects compared with non-warranty projects.
• Unsatisfactory (for state agencies) results of disputes and lawsuits, when projects suffered from lack of good material test results and contractors had results showing otherwise.
• Protracted and expensive disputes and lawsuits, even when pavements did not meet warranty requirements.
• Little or no reduction in agency staffing, contrary to predictions.
• Difficulty in developing warranty acceptance criteria.
• Significant extra charges from sureties for warranty bonds that extend more than 3 to 5 years.
• Reduced ability of contractors to bid, since warranty bonds count against their total bonding capacity.
• FHWA’s elimination of support for the warranty program, due to reduced funding and changing priorities

Regarding the possibility of applying performance warranties to stabilized slopes, there is no known experience among the states in this area. The development of acceptance criteria would be a major challenge. For example, deciding whether erosion is due to normal conditions or to contractor performance failure would often be controversial. Large P3 projects, wherein everything is warranted, do include warranties for slopes and other parts of the roadside.

On the topic of whether to perform roadside maintenance, including stabilized slopes, with agency forces or by contract, most states use their own crews, although several states maintain these assets under contract with the private sector. Large slope failures are often repaired under contract.

Possible approaches Alaska might take regarding maintenance of these slopes include:

• Development of materials and workmanship warranty criteria for construction contracts on a project-by-project basis for maximum periods of 5-year guarantees. Some states call these warranties “M&W guarantees,” in order to avoid contractual issues surrounding the term “warranty.” It would take considerable effort to develop suitable criteria for such.
• Small maintenance contracts with the local population (similar to what is done at Alaska’s rural airports), or larger contracts on a more regional basis.

Warranties and Stabilized Slopes

After our extensive investigation of warranty contracting in U.S. highway construction, we returned to the central question addressed in this portion of the project: Are warranties of any sort appropriate in dealing with the maintenance of stabilized slopes in remote cold regions such as rural Alaska? If the question relates to performance warranties, the answer is decidedly “no.” If the question relates to materials and workmanship warranties, the answer is “maybe.”

Period of Establishment

Many states include a “period of establishment” in their construction specifications for seeding and plantings. The common understanding of “establishment period” is the period that “encompass(es) the time required by the planting to become acclimated to the growing conditions at the planting site” (Alaska Department of Transportation 2016).

During this period, the contractor is responsible for assuring that the planted material attains a specified level of survival and growth. Although the term warranty is not used, the requirement has the same purpose—a guarantee by the contractor of a certain level of “performance” over a specified time frame. We reviewed several state construction specifications (the same set used to review warranty provisions), to determine what types of establishment period provisions were included. The results are shown in Table 2.2

Table 2.2 Sampling of state highway specifications establishment periods for seeding and planting

Although there are some gaps in these findings, the considerable variety in the way states approach the time requirement for seeding and planting establishment is clear. Some states specify a number of years (one or two is common) or even days. Some states are more flexible, allowing for project-specific periods. Some (like for Alaska’s Northern Region) define the end of the period by the percent cover that must be achieved. British Columbia, in its design-build specifications, requires what is essentially a 1-year performance warranty for both seeding and plantings.

Alaska’s Standard Specifications for Highway Construction (Alaska Department of Transportation and Public Facilities 2016) provide for a 1-year establishment period for roadside seeding and plantings, except in the Northern Region, where the contractor is responsible for maintaining the seeding until a vegetative cover of 70% is achieved. (Alaska Department of Transportation 2016). One approach for assigning to the contractor greater responsibility for establishing vegetation growth would be to extend that establishment period.

In the case of remote cold regions such as in rural Alaska, where there are challenges in keeping vegetated slopes sufficiently maintained, a possible remedy might be to extend the establishment period to, say, 2 years or 2 growing seasons. To test the cost of this approach, contractors could be asked to bid an alternate with such a provision.

Other Warranty Approaches

If the contract requires compliance with a “period of establishment” specification, such a requirement might be considered a performance warranty over a very short period. (It could also be called a materials and workmanship-type warranty, but there is no need to argue that distinction here.) Beyond that period of establishment, it seems impractical to invoke any sort of warranty.

Especially when dealing with planted materials, and especially on sloping ground, the disadvantages of short-term and long-term performance warranties cited ad infinitum in this report become apparent. Except for design-build contracts, the contractor has no participation in the design. Setting and enforcing performance criteria can be problematic. Obtaining reasonably priced bonding may be impossible. And then, exclusions, for which the contractor cannot be held responsible, would need to be anticipated and stated: weather (too much precipitation or too little, gnarly breakup, glaciering due to unexpected temperature conditions), errant ATVs and snow machines, animal damage, and traffic accidents. The use of these types of warranties is simply not practical for the kind of work that is the subject of this research study.

Our recommendations for consideration by highway system owners and contractor include the following:

• In the short run, continuing to perform roadside maintenance with in-house forces, at least in Alaska, is most appropriate, rather than pursuing performance warranty contracting for this work.
• A more comprehensive study of methods by which maintenance work is performed in all U.S. states and overseas, especially for roadside assets including slopes, would yield valuable findings.
• Agencies could easily and with little cost determine the cost effect of different establishment periods for seeding and plantings by including alternates in their bid packages for different periods.
• For future design-build and public-private partnership projects, consideration should be given to including roadside maintenance among the items to be warranted.
• Close collaboration among agencies, contractors, and the surety industry may result in some innovative ways to provide less expensive bonding strategies for warranty projects.

U.S. Department of Transportation. (2017). Federal Highway Administration. Pavement Warranties – Guidance. https://www.fhwa.dot.gov/pavement/ warranty/guidance.cfm.

Updated June 27.

U.S. National Archives and Records Administration. Code of Federal Regulations. (1994).

Warranty of Construction, title 52, sec. 246.21.

Washington State Department of Transportation. (2010). Alaskan Way Viaduct SR99 Bored Tunnel Alternative Design-Build Project Request for Proposals. May 26.

Whited, G. (2017). Wisconsin Department of Transportation. Personal telephone conversation, September 6.

Wikipedia. (2017). “Seral community.” Retrieved June 12, 2017, from https://en.wikipedia.org/wiki/Seral_community

Zlatkovic, M., Porter, R. J., and Kergaye, C. (2015). “Performance-Based Warranty Contracts for Pavement Markings: Experience and Lessons Learned in the State of Utah.” Transportation Research Record. Journal of the Transportation Research Board, No. 2504, 49–57. http://trrjournalonline.trb.org/doi/10.3141/2504-06.

APPENDIX A: DOT SPECIFICATIONS SECTION 618 SEEDING

618-1.01 DESCRIPTION. Establish a perennial stand of grass or other specified living vegetative cover, by seeding, in the areas indicated on the Plans. Maintain the cover for the term of the Contract.

618-2.01 MATERIALS. Use materials that conform to the Special Provisions and the following:

• Seed Section 724
• Fertilizer (20-20-10)      Section 725
• Water    Subsection 712-2.01

CONSTRUCTION REQUIREMENTS

618-3.01 SOIL PREPARATION. Clear all areas to be seeded of stones 4 inches in diameter and larger and of all weeds, plant growth, sticks, stumps, and other debris or irregularities that might interfere with the seeding operation, growth of grass, or subsequent maintenance of the grass- covered areas.

Make areas to be seeded reasonably free of ruts, holes, and humps. When specified, apply topsoil according to Section 620.

Roughen the surface to be seeded by grooving the soil in a uniform pattern that is perpendicular to the fall of the slope. Use one or more of the following grooving methods prior to the application of seed:

• Manual raking with landscaping rakes;
• Mechanical track walking with track equipment; or
• Mechanical raking with a scarifying slope board. Form one inch wide grooves spaced no more than six inches apart.

You may round the top and bottom of slopes to facilitate tracking or raking and to create a pleasant appearance, but you may not disrupt drainage flow lines.

618-3.02 SEEDING SEASONS. Seed and fertilize during the local growing season.

Do not seed during windy conditions or when climatic conditions or ground conditions would hinder placement or proper growth.

Seed disturbed areas that require seeding within fourteen days of the permanent cessation of ground-disturbing activities in that area.

Seed between May 15 and August 15, or obtain written approval from the Engineer to seed at a different date.

618-3.03 APPLICATION. Apply seed mix, fertilizer, and mulch (if required) at the rate specified in the special provisions. If no seed mix, seed mix application rate, or fertilizer rate are specified in the special provisions, use the recommendations of the Alaska Department of Natural Resources (DNR) and the Revegetation Manual for Alaska.

Do not seed areas of bedrock, plant beds, and areas indicated on the plans as “no seeding”. Water and fertilizer required for application are subsidiary to the Seeding bid item.

Use any of the following methods:

• Hydraulic Method.
  • Furnish and place a slurry made of seed, fertilizer, water, and other components as required by the Special Provisions.
  • Use hydraulic seeding equipment that will maintain a continuous agitation and apply a homogeneous mixture through a spray nozzle. The pump must produce enough pressure to maintain a continuous, nonfluctuating spray that will reach the extremities of the seeding area with the pump unit located on the roadbed. Provide enough hose to reach areas not practical to seed from the nozzle unit situated on the roadbed.
  • If mulch material is required, it may be added to the water slurry in the hydraulic seeder after adding the proportionate amounts of seed and fertilizer. Add seed to the slurry mixture no more than 30 minutes before application.
  • Mix the slurry and apply it evenly.
• Dry Methods.
  • Use mechanical spreaders, seed drills, landscape seeders, aircraft, cultipacker seeders, fertilizer spreaders, or other approved mechanical spreading equipment when seed and fertilizer are to be applied in dry form.
  • Spread fertilizer separately at the specified rate.

618-3.04 MAINTENANCE AND WATERING. Protect seeded areas against traffic by approved warning signs or barricades. Repair surfaces gullied or otherwise damaged following seeding. Maintain seeded areas in a satisfactory condition until final acceptance of work.

Water and maintain seeded areas. Water applied by this Subsection is a paid contract item. If, in the opinion of the Engineer, too much water is being applied, reduce amount of water as directed.

Reseed areas not showing evidence of satisfactory growth within 3 weeks of seeding. Bare patches of soil more than 10 square feet in area must be reseeded. Erosion gullies over 4 inches deep must be filled and reseeded. Fill the entire erosion gully to surrounding grade, even the portions less than 4 inch deep.

Contact DNR for advice or corrective measures, when seeded areas are not showing evidence of satisfactory growth. You are responsible for retracking, reseeding, refertilizing and remulching areas that do not show satisfactory growth, and those actions are subsidiary.

618-3.05 ACCEPTANCE. The Engineer will perform a visual inspection of seeding to determine final stabilization. During the visual inspection each station and each side of the road will be considered a separate area. The Engineer will accept seeding that has become a vegetative matt with 70% cover density in the inspection area.

Reseed areas that are not acceptable to the Engineer.

618-3.06 PERIOD OF ESTABLISHMENT. Establishment periods extend for one complete growing season following acceptable seeding. Employ all possible means to preserve the new vegetative matt in a healthy and vigorous condition to ensure successful establishment. Reseed areas that do not meet the specifications. Watering and reseeding after the final inspection are subsidiary.

The Engineer may, but is not required to, determine the Project is complete except for the period of establishment, and issue a letter of final acceptance. After final acceptance, work or materials due under this subsection during any remaining period of establishment are considered warranty obligations that continue to be due following final acceptance in accordance with Subsection 105- 1.16.

618-4.01 METHOD OF MEASUREMENT. See Section 109 and as follows: Seeding by the Acre. By the area of ground surface acceptably seeded and maintained. Seeding by the Pound. By the weight of dry seed acceptably seeded and maintained.

Water for Seeding. If weighed, a conversion factor of 8.34 pounds per gallon will be used to convert weights to gallons.

618-5.01 BASIS OF PAYMENT. Mulching will be paid for under Section 619.

Seeding by the Acre. Payment is for established vegetative matt. Soil preparation, fertilizer, and water required for hydraulic method are subsidiary.

Seeding by the Pound. Payment is for established vegetative matt. Soil preparation, fertilizer, and water required for hydraulic method are subsidiary.

Water for Seeding. Water applied for growth of vegetative matt. Water for hydraulic seeding, fertilizing or mulching is subsidiary. Water after project completion is subsidiary.

Payment will be made under:

Pay Item	Pay Unit
618(1) Seeding	Acre
618(2) Seeding	Pound
618(3) Water for Seeding	M Gal.

SECTION 610 DITCH LINING

610-1.01 DESCRIPTION. Construct ditch lining at the locations on the Plans or as staked.

610-2.01 MATERIALS. Use stones that are sound and durable, are no larger than 8 inches in greatest dimension, and not more than 50% by weight passing a 3-inch sieve as determined by ATM 304.

610-3.01 CONSTRUCTION REQUIREMENTS. Excavate to the dimensions shown on the Plans. Place and spread ditch lining materials so that the finished face is reasonably uniform and conforms with the lines and slope shown on the Plans or as directed.

610-4.01 METHOD OF MEASUREMENT. Section 109.

610-5.01 BASIS OF PAYMENT. Excavation required below normal ditch grade is subsidiary. Payment will be made under:

Pay Item	Pay Unit
610(1) Ditch Lining	Cubic Yard
610(2) Ditch Lining	Ton
610(3) Ditch Lining	Station

 

703-2.08 FILTER BLANKET. Meet AASHTO M 80, Class A. Meet the following gradation: AASHTO M 43, size No. 467.

703-2.09 SUBBASE. Hard, durable particles or fragments of stone or gravel. Do not use materials that break up when alternately frozen and thawed or wetted and dried. Do not include muck, frozen material, roots, sod, or other deleterious matter. Meet Table 703-8.

TABLE 703-8: QUALITY PROPERTIES FOR SUBBASE

L.A. Wear,%	AASHTO T 96	50, max.
Liquid Limit	ATM 204	25, max.
Plasticity Index	ATM 205	6, max.
Degradation Value	ATM 313	40, min.

Meet the grading requirements of Table 703-9 (ATM 304).

Grading C and Grading D: Crushed aggregate with at least 50% by weight of the particles retained on the No. 4 sieve having at least one fractured face as tested by ATM 305.

TABLE 703-9: AGGREGATE GRADATION FOR SUBBASE

Percent Passing by Weight

	GRADING
	A	B	C	D	E
4 in.	100	—	—	—	—
2 in.	85-100	100	—	—	—
1 in.	—	—	100	—	—
3/4 in.	—	—	—	100	—
No. 4	15-60	15-60	40-75	45-80	—
No. 16	—	—	20-43	23-50	—
No. 200 *	10 Max.	0-6	4-10	4-12	0-6

*  Gradation shall be determined on that portion passing the 3-inchscreen.

703-2.10 POROUS BACKFILL MATERIAL. Gravel consisting of crushed or naturally occurring granular material containing not more than 1% clay lumps or other readily decomposed material (AASHTO T 112). Meet the grading requirements of Table 703-10 (ATM 304).

TABLE 703-10: AGGREGATE GRADATION FOR POROUS BACKFILL MATERIAL

SIEVE	PERCENT PASSING BY WEIGHT
3 in.	100
1 in.	0-10
No. 200	0-5

703-2.11 GABION BACKFILL. Stone and gravel, uniformly graded from 4 to 12 inches in least dimension and having no more than 60% wear (AASHTO T 96).

703-2.12 SAND BLANKET. Sand containing no muck, frozen material, roots, sod or other deleterious matter and with a plasticity index not greater than 6 as determined by ATM 204 and ATM 205. Meet the grading requirements of Table 703-11 as determined by ATM 304. TABLE 703-11

SAND BLANKET MATERIAL GRADATION

SIEVE	PERCENT PASSING BY WEIGHT
3/8 in.	100
No. 4	95-100
No. 200	0-6

703-2.13 STRUCTURAL FILL. Aggregate containing no muck, frozen material, roots, sod or other deleterious matter and with a plasticity index not greater than 6 as determined by ATM 204 and ATM 205. Meet the grading requirements of Table 703-12 as determined by ATM 304.

TABLE 703-12: AGGREGATE GRADATION FOR STRUCTURAL FILL

SIEVE	PERCENT PASSING BY WEIGHT
3 in.	100
3/4 in.	75-100
No. 4	15-60
No. 16	10-30
No. 200	0-6

 703-2.14 AGGREGATE FOR ABRASIVE FINISH. Crushed silica sand, oven dried, and stored in moisture-proof bags. Free from clay balls, vegetative matter, or other deleterious matters (AASHTO T 112). Not coated with dirt or other finely divided mineral matter. Meet the grading requirements of Table 703-13 as determined by ATM 304.

TABLE 703-13: GRADATION FOR SAND FOR ABRASIVE FINISH

SIEVE	PERCENT PASSING BY WEIGHT
No. 12	100
No. 40	0-5

703-2.15 CRUSHED GLASS. Up to 10% by weight crushed glass (cullet) smaller than 3/8-inch may be uniformly blended with natural soil-aggregate material prior to project delivery and placement. Glass cullet must be free of soil, paper, plastic, metals, organic material and other deleterious and hazardous substances. No more than 2.0% debris should be present as determined by Section X3 of AASHTO M318.

Eligible glass products from which glass cullet might be produced include: food and beverage container glass; plain ceramic or china dinnerware; or building window glass.

Prohibited glass products include: automobile windshields or other glass from automobiles; light bulbs of any type; porcelain products; laboratory glass; television, computer or other cathode ray monitor tubes.

Provide documentation identifying the origin of the glass products and certifying the glass cullet:

• Does not contain prohibited materials,
• Meets debris content requirement.

Uniformly blend glass cullet and natural soil-aggregate and meet the gradation requirements of Table 703-14.

APPENDIX B: SPECIFICATIONS AND OTHER DOCUMENTS REVIEWED FOR WARRANTY AND PLANT ESTABLISHMENT PROVISIONS

2009 Design Build Standard Specifications for Highway Construction, Volume 2 of 2, British Columbia Ministry of Transportation and Infrastructure,

2012 Standard Specifications for Construction, Michigan Department of Transportation,

2016 Standard Specifications for Highway Construction, British Columbia Ministry of Transportation and Infrastructure,

2017 Standard Specifications for Highway Construction, Idaho Transportation Department.

Alabama Department of Transportation, Standard Specifications for Highway Construction, 2012 Edition.

Alaska Department of Transportation and Public Facilities, Standard Specifications for Highway Construction, 2016 Edition.

Standard Specifications for Road, Bridge, and Municipal Construction 2016, Amended August 7, 2017, Washington State Department of Transportation.

Standard Specifications State of California, California State Transportation Agency, Department of Transportation, 2015.

State of Wisconsin Department of Transportation, Standard Specifications for Highway and Bridge Construction, 2018 Edition.

West Virginia Department of Transportation Division of Highways, 2017 Edition, Standard Specifications Roads and Bridges.

Arizona Department of Transportation, ADOT Construction Manual. https://www.azdot.gov/business/engineering-and-construction/construction-and- materials/manuals/ConstructionManual, accessed 30 October 2017.

Arizona Department of Transportation, Standard Specifications for Road and Bridge Construction, 2008.

Colorado Department of Transportation, Standard Specifications for Road and Bridge Construction, 2017

Florida Department of Transportation, Standard Specifications for Road and Bridge Construction, July 2017.

Indiana Department of Transportation, Standard Specifications, 2018.

Minnesota Department of Transportation, Inspection and Contract Administration Manual for MnDOT Landscape Projects, 2017 Edition.

Minnesota Department of Transportation, Standard Specifications for Construction, 2016 Edition.

Mississippi Standard Specifications for Road and Bridge Construction, Mississippi Department of Transportation Jackson, 2017 Edition

Public Private Partnership (P3) Design-Build-Maintain Agreement for 202 MA 054 H882701C SR 202L (South Mountain Freeway) between Arizona Department of Transportation and Connect 202L Partners LLC, February 26, 2016.

APPENDIX C: CONSTRUCTION WARRANTY INTERVIEWEES

Name	Affiliation	Date (all 2017)
Jake Allen, P.E.	Alaska DOTPF*, Northern Region	September 27
Jeff Alling, Matt Brockman	Alcan Builders Inc.	September 14
Bert Bell, P.E.	Ghemm Company Contractors (ret)	September 19
Frank Ganley, P.E.	Alaska DOTPF, Northern Region	September 7
Tony Johansen, P.E.	Great Northwest, Inc.	September 15
Marc Luiken	Alaska DOTPF, Commissioner	September 11
Clark Milne, P.E.	DOWL	September 11
Jason Sakalaskas, P.E.	Alaska DOTPF, Northern Region	September 18
Doug Smith, Mark Erickson	Haskell Corporation / Mass X, Inc.	September 15
Marcus Trivette, P.E.	Brice, Inc.	September 21
Al Vezey	Lakloey, Inc.	September 6
Gary Whited, P.E.	University of Wisconsin/ Wisc DOT	September 6
Ray Willard	Washington DOT	September 7

*DOTPF = Department of Transportation and Public Facilities

APPENDIX D: WARRANTY EXAMPLES RELATED DURING INTERVIEW

Project	Warranty Type	Description
Vehicle scale project	Materials & workmanship; maintenance	Initial contract had M & W warranty; Maintenance contract separate but by same contractor with 2 to 3-year maintenance warranty
Baked-on paint	Performance	Bubbles formed after 15 years; difficult to determine cause; warranty not enforced. Owner paid for warranty in contractor’s price.
Sports rrena roof	Performance	Warranted for 20± years; needed repair after 10± years. General passed responsibility to roofing sub; resolved satisfactorily.
Dormitory-type building	Performance	Redesign suggested by contractor: thick (16”±) concrete floor in lieu of waffle system. Bad soil. After 2 years bubbles under vinyl flooring due to continuing presence of moisture. Builders risk insurance covered the cost of replacement
Heap leaching & sanitary landfills	Materials & workmanship	HDPE liners; crucial that they work correctly; such warranties are appropriate & successful.
Dust control palliatives	Performance	For rural airport gravel runways; warranty used on trial basis; see sidebar for more detailed case study.
Military facility boiler	Performance	Owner thought of it as an operations and maintenance contract; contractor had to respond to requests or risk losing retainage.
Cell tower installation	Performance	Specs called for landscape bond; instead, contractor posted $3000 deposit in lieu of bond. Sub guaranteed the plantings. Contractor did not recover deposit at end.
Wind farm (wind turbines)	Performance	2-year performance warranty; designer part of team; design-build type called EPC – Engineer- Procure-Construct; problem with permafrost soils; some warranty re-work.
Seeding on saline soil (Kotzebue)	Materials & workmanship	Contractor used proper seed and methods; seed did not grow; owner agreed it was not contractor’s fault.

APPENDIX E: BONDING ARIZONA’S $1.77 BILLION SOUTH MOUNTAIN FREEWAY DESIGN-BUILD-MAINTAIN PROJECT

The Loop 202 (South Mountain Freeway) is adding 22 miles of freeway to the existing Phoenix metropolitan transportation system. The freeway will connect the east and west valley while providing much needed relief to existing freeway corridors and local streets.

Connect 202 Partners, LLC (Fluor Enterprises, Granite Construction, Ames Construction and DBI Services) was awarded a design-build and maintain contract by the Arizona Department of Transportation (ADOT) to complete work on the largest highway project in the state’s history. Connect 202 Partners will provide design, construction and 30 years of maintenance services for the Loop 202 South Mountain Freeway.

This project is the first freeway project procured under Arizona’s public-private-partnership (P3) statute and ADOT’s first design-build-maintain project. The $1.77 billion project is funded by a combination of Regional Area Road Fund revenues, Highway User Revenue Fund revenues and federal funds dedicated to the Maricopa County region and ADOT.

Many of the project’s elements will be maintained under the separate maintenance agreement with Connect 202 Partners, which will be covered by its own payment and performance bonds.

One-year material and workmanship warranties for non-maintained items are required, with a separate warranty bond to protect the owner for this work.

Thus, the total bond package includes D&C (Design and Construction) Payment Bond, D&C Performance Bond, Warranty Bond, Maintenance Payment Bond, and Maintenance Performance Bond.

Construction began in September 2016, with its four individual segments being constructed simultaneously. Project completion is scheduled for late 2019.

Information from

Public Private Partnership (P3) Design-Build-Maintain Agreement for 202 MA 054 H882701C SR 202L (South Mountain Freeway) between Arizona Department of Transportation and Connect 202L Partners LLC, February 26, 2016.

Connect 202L Partners, Building Loop 202. website accessed October 27, 2017. http://www.connect202partners.com/

Arizona Department of Transportation, Loop 202 South Mountain Freeway. Website accessed October 27, 2017. https://www.azdot.gov/projects/central-district-projects/loop-202-(south- mountain-freeway).

APPENDIX F: AN ALASKAN PERFORMANCE-TYPE WARRANTY CONTRACT CASE STUDY

The construction and maintenance of gravel runways at Alaska’s rural airports poses special challenges for the Alaska Department of Transportation and Public Facilities. With few exceptions, these airports are located in rural communities that are not connected to Alaska’s road system, serving villages with populations ranging from 25 to 300 and more. Thus, rural, gravel-surfaced airports, some 200+ in number, provide vital links to the rest of world for these small and otherwise isolated places.

One of the especially significant challenges to operating rural airports is dust control. Risks to human and animal health, safety and the environment are well-documented problems associated with airborne dust. Several types of products have been used as dust palliatives on gravel roads and runways, including water, salts and brines (e.g., calcium chloride and magnesium chloride), non-petroleum palliatives such as lignosulfonates, synthetic fluids with proprietary formulas produced by several manufacturers with such product names as EK-35, Enviroclean, and Durasoil, and polymer powders, such as vinyl acrylics, polyvinyl acrylics, and blends thereof. (Barnes & Connor 2014).

The palliative is applied to the prepared gravel surface by spraying or dropping. Proper preparation of the surface includes the right aggregate material, proper cross-section profile, and adequate drainage. For effective performance, sieve-size gradation of the surface course material must include sufficient fine material. Uniform application is important. Depending on the type of palliative, it is mixed into the surface or allowed to seep into the surface without further processing.

An important consideration in these remote villages is that any specialized application and monitoring equipment not available in the community must be compact and light weight enough to be easily transported to the village by air.

In 2009, the Alaska Department of Transportation and Public Facilities (DOT&PF), in cooperation with the Alaska University Transportation Center at the University of Alaska Fairbanks, undertook a program to reduce fugitive dust at many of the state’s rural airports. Dust problems had been studied for a number of years, with several projects conducted at UAF and sponsored by the Alaska DOT&PF and others. (Barnes 2013, McHattie 2015a & 2015b, Succarieh 1992). This research resulted, among other outcomes, in the invention, development and testing of a device, known as DUSTM, intended for the measurement of fugitive road and runway dust in remote rural communities. (Eckhoff 2012) This mobile monitoring device is mounted on a small all-terrain vehicle and collects air samples as it traverses the gravel surface.

As part of its airfield dust control effort, the Alaska DOT&PF published, in 2008, a set of specifications for dust palliative applications at nine, individual-lot airport dust suppression projects to be carried out in summer 2009.

Of significance to this report on construction contract warranties, the specification prescribed a performance warranty-type of requirement for the eventual supplier of the palliative material. It provided that the supplier would be responsible for the product’s dust reduction performance, and it set forth a simple performance measurement standard, to be based on samples collected by the DUSTM device before and after application of the palliative. Application of the palliative was performed by Alaska DOT&PF personnel, as was subsequent airfield surface maintenance and snow removal.

The following are quotations from the material supply specifications:

An effective and long-term dust palliative result (substantial diminishment of fugitive dust release) for at least two full years after ADOT&PF personnel complete the application of the palliative product. …. Within the time period of from 2 days to 30 days after final placement of the dust palliative product, measurements will be made with the University of Alaska Fairbanks’ DUSTM device (see discussion on page 5, below), and an average reduction of no less than 80% in the fugitive dust amount must be measured by the instrument on the palliative treated runway, in comparison to the adjacent, untreated area of runway, or else the fugitive dust suppression result will be considered to be inadequate. One year (plus or minus 20 days) after the final placement of the dust palliative product at each airport, measurements will again be made with the UAF DUSTM device, and an average reduction of no less than 55% in the fugitive dust amount must be measured by this instrument on the palliative treated runway, in comparison to the adjacent, untreated area of runway, or else the fugitive dust suppression result will be considered to be inadequate….

If the initial dust reduction measurement, made soon after the application procedure is completed, does not indicate at least an 80% reduction in dust release, no payment will be provided to the product supplier until this dust suppression failure is rectified. The dust palliative supplier will be expected to provide additional palliative product and deliver it to the airport at no cost to the AKDOT&PF, to re-treat the airport’s aggregate surfaces if either of the two dust measurements do not meet the dust release reduction levels specified.

The specifications also included exclusions, as follows:

Any weather or vehicle-related damage to aggregate surfaces treated with the supplier’s dust palliative product is the responsibility of the AKDOT&PF. Repairing such damage is also the responsibility of the AKDOT&PF. Repairs may include grading, compacting at near-optimum moisture content and possible replacement of dust palliative product. The dust palliative supplier will not be held responsible for the performance of any repaired surfaces that have been treated with dust palliative product as specified herein if the supplier’s guidelines for maintenance have not been followed during the DOT&PF’s application program.

Other information included in the specifications included a list of equipment likely to be used for applying the palliative at each airport (by Alaska DOT&PF personnel), non-corrosivity and other environmental requirements, a list of the nine airports and their runway dimensions, a description of the DUSTM device, and a bid schedule for each airport.

Reasons for initiating a performance warranty-type specification were the following:

1. Palliative suppliers, despite advertising claims, did not have a standardized way to measure (with repeatable results) or evaluate, scientifically, how much dust control was actually provided by their products. Thus, the relative value and longevity of their palliative applications was difficult for the purchaser to establish
2. The palliative suppliers seldom differentiated how much of their product was necessary or desirable in order to accomplish substantial dust release reduction results. The DOT&PF performance specification made it their decision about how much product would be needed per square foot, to meet the dust reduction requirements.
3. Lastly, the performance specification openly stated the constraints and potential complications of the dust palliative process. DOT&PF was to do the installation, and then airport maintenance contractors graded and snowplowed the runway and apron surfaces, so normal usage and surface deterioration was to be expected. The palliative suppliers were thus “forewarned” about what to plan for.

DOT&PF’s experience in working through the bid process for remote airport dust palliative applications was an adventure in itself. The performance specification was complex enough, and detailed enough, that it promptly discouraged almost all of the wide array of less-qualified palliative suppliers. Only a handful of bidders provided quotes, and the low bidders were all very experienced and confident in the likely performance of their products. The level of detail indicated in the specification write-up led to an impression by the palliative suppliers that the department was intending to be fair in doing the application, properly maintaining the aggregate surfaces and taking responsibility if aspects of the project caused failure of the dust control process, when it was not caused by the supplier’s product lack of performance.

This performance warranty-type approach was used from 2009 to about 2011, when the DOT&PF Northern Region shifted to purchasing specified amounts (in 280 gallon totes) of EK- 35 and Durasoil, delivered to the remote airport aprons. During that time period (approximately 2012 to 2014), DOT&PF experienced a string of generally positive airfield dust control results, affecting twenty more small airports during those three years.

At the same time, some limitations became apparent: it was difficult to agree on whether some failures fell within the suppliers’ warranty responsibilities, and there were disagreements over the performance evaluation standards. Some of the suppliers filed appeals, but no formal claims or lawsuits resulted.

Currently (2017), the performance warranty specification is not used for this dust palliative program. Reasons cited are 1) other initiatives within the department have been given higher priority; 2) there is no longer a champion to spearhead the program, and 3) despite the positive effects of performance standards noted below, difficulties in setting and enforcing those criteria made it difficult to administer.

Lessons learned from this performance warranty-type specification program can be listed as follows:

1. The establishment of a measurable, verifiable dust-release and dust control standard dramatically affected the attention of the palliative suppliers to the provable (or not) success of their product while bringing proper focus to the various aspects of the process that could cause dust control failure, and result in extra costs for the supplier. Thus, in general, product quality improved.
2. The standard of performance tended to lead to more realistic and data-based evaluations by DOT&PF and its client villages as to whether or not dust control was worthwhile and sufficient to continue, instead of shifting to other useful airfield expenditures. Having a better grasp of what it cost to do dust control and for how long the palliative accomplished that dust reduction, given various other factors that altered the results, made the work more accurately evaluated fiscally.
3. The clear definition of what was expected, and how it would be measured, strongly discouraged the involvement of sub-quality suppliers. It annoyed the capable suppliers too, but that was primarily because both UAF and DOT&PF were out on the edge of normal practice, developing a repeatable measurement method which was not part of the suppliers’ previous experiences. The department’s honesty and good-faith execution of contracts over the first few years kept the good suppliers returning to bid cost-effectively on airport dust control projects. Over 50 Alaska airports had dust palliatives applied from 2005 to 2015.

Dust at a rural Alaska airport

Dr. David Barnes and his DUST-M dust analyzer

Palliative application at Boundary, Alaska

The authors appreciate the contributions of Clark Milne, P.E., former Alaska DOT&PF Northern Region Maintenance Engineer, to this case study.

Works Cited

Barnes, D. (2013). “Dust Control for Unpaved Roads and Runways in Rural Alaska.” Alaska Department of Transportation and Public Facilities/ INE/UAF/AUTC Tech Brief #001, September.

Barnes, D. and B. Connor. (2014). Managing Dust on Unpaved Roads and Airports. Alaska Transportation Research Center/Alaska Department of Transportation and Public Facilities. INE/ AUTC 14.14, Report No. 4000096.

Eckhoff, T.W. (2012). Evaluating Dust Palliative Performance and Longevity using the UAF- DUSTM. Thesis Presented to the Faculty of University of Alaska Fairbanks. December, 83 p.

McHattie, R. (2015b). “A Practical Look at Dust Control on Gravel Roads in Cold Regions.” Presentation at Summer Transportation Institute, Center for Environmentally Sustainable Transportation in Cold Regions, June 8-12.

McHattie, R.L. (2015a). Dust Control Field Guide for Gravel Driving Surfaces. Alaska Department of Transportation, Research & Technology Transfer. July, 35 p.

Succarieh, M. (1992). Control of Dust Emissions from Unpaved Roads. Institute of Northern Engineering Transportation Research Center. Report No. INE/TRC/QRP – 92.05, May, 49 p.