State-of-Practice of Warranty Contracting in the United States

Abstract

This paper presents the results of a comprehensive survey on warranty practices in the United States and a summary of the impact of warranty implementation on highway projects, based on questionnaire responses and interviews of State Department of Transportation (DOT) representatives, contractors, and surety companies. According to the results of the survey, the initial bid price increases due to warranty provisions are estimated to be somewhere between 0 and 15%, while the changes in maintenance and project life-cycle costs are expected to be minimal. Warranty provisions increased the quality of the projects and reduced the need for site inspection and record keeping for state DOTs. The study also revealed the unwillingness of surety companies to underwrite small contractors when the project calls for long term warranty durations.