Determinants of Industry Acceptance for Highway Warranty Contracts: Alabama Case Study

Abstract

There is an increasing demand from state DOTs to explore alternative ways to provide adequate oversight on construction projects. As one of the innovative contracting techniques encouraged by the Federal Highway Administration, warranties in highway construction hold contractors accountable for potential maintenance for a given period of time after project completion. The warranty practices in many states indicate that such provisions would benefit the state DOTs by improving quality, reducing life-cycle costs and project duration, and encouraging contractor innovation. However, the successful implementation of warranty contracting needs widespread industry acceptance and collaboration. This paper presents the findings of a recent research on the industry acceptance of warranty contracting in the state of Alabama. The paper identifies several major concerns and the needs of the construction industry with respect to the subject matter. More importantly, the paper reports a learning process in using warranties in highway construction. Results shows that factors like leniency in specifications, tort liability, and contractors’ past experience on warranty jobs help achieve a significance level of industry acceptance. The findings presented in this paper would help those state highway agencies that have limited experience in integrating warranties effectively into their contracts.