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Based on the benefits demonstrated during the
Arizona Department of Transportation’s (Department) use of A+B bidding, the
Legislature should consider amending statute to allow the Department and
Transportation Board to use A+B bidding for appropriate state highway
construction projects. A+B bidding differs from traditional highway construction
contract bidding in that it considers the time to complete a highway
construction project in addition to a project’s cost. This bidding method is
particularly advantageous if completing a project quickly is desirable or
project construction is anticipated to seriously impact and cause inconvenience
to road users. The Legislature authorized the Department and Board to use A+B
bidding for up to 20 highway construction contracts between October 1, 1997, and
October 1, 1999. The Department and Board issued 6 A+B contracts , 3 of which
have been completed. Even with this limited experience, A+B bidding has been
shown to significantly reduce construction times and associated
construction-related impacts.
The Department has also generally complied
with statutory limits for changes to highway construction contracts. However,
the cost of these changes continues to increase. In 1993, final construction
costs exceeded their original contract amounts by 2.9 percent. For the first 6
months of 1999, contract overruns have increased to 9.7 percent. Based on the
Department’s current rate of completion for highway construction projects,
each 1 percent of cost increase could add over $3 million annually to final
construction costs.
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