Methodology to Assess the Impact of Lump-Sum Compensation Provisions on Project Schedules

Abstract

Although alternative project delivery methods have become increasingly popular among state transportation agencies and researchers, common design-bid-build (DBB) procurement methods are the most prevalent technique employed in the infrastructure industry. This paper presents a tool that assists the Florida Department of Transportation (FDOT) to identify DBB resurfacing projects that would offer better schedule performance if executed with lump-sum (LS) payment provisions instead of the traditional unit price compensation technique. The proposed tool facilitates a risk-based assessment of the potential schedule implications of using LS provisions on an intended resurfacing project. Statistical methods were used to develop the decision tool incorporating 86 resurfacing FDOT project data from 2015 to 2017. The proposed tool is presented in the form of a nomogram. Under each compensation technique, the nomogram allows for a prompt approximation to the probability of obtaining shorter project durations. Also, the nomogram quantifies under different levels of confidence the LS schedule implications, enabling FDOT decision-making at different risk degrees.