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When projects suffer noncompletion, state highway agencies (SHAs) may trigger liquidated damage (LD) provisions, and at times, contractors may challenge their enforceability. Normally, to be compensated for the costs expected during the delay, states design the LD schedules by associating LD rates to specific contract sizes. A review of the literature found that states varied significantly in the LD schedule designs. However, no studies have explored the relationship between the LD rates and contract sizes (LDR-CS) across states. Exploring this relationship could lead to identifying the underlying model of the relationship, explaining how states vary the LD rates against contract sizes, running comparative analyses of the states' LD schedules, and designing optimal LD schedules, among other potential benefits. To realize these benefits, the objectives of this work were to (1) statistically explore and characterize the LDR-CS relationship, and (2) develop a representative model of the relationship. To achieve these objectives, descriptive, box–whisker, and cluster analyses were performed to characterize the relationship, and regression analysis was utilized to search for the best-fit representation model. The relationship was found to be challenging; it had a unique L-shape, and was modeled successfully only using transformed nonlinear regression. The research results could facilitate performing LD comparative analysis among states, help SHAs assess and build confidence in their LD rates, and help update and optimize LD schedule designs. This work contributes to the body of knowledge with new statistical dimensions to comprehend the LDR-CS relationship, providing tables, charts, and transformed nonlinear models. [ABSTRACT FROM AUTHOR]

Contractors tend to challenge the enforceability of liquidated damages (LDs), claiming they are unreasonable, excessive, penalty statements, or concurrently caused. States customarily assert that the LD rates are a genuine reflection of the expenses expected to be suffered when a project gets delayed due to noncompletion. While there are common practices among the states for articulating LD specifications, which generally follow the Federal Code of Regulations, there are no published studies that assist states in comparing their LD rates to those of other states so that the LD rates might be defended. Further, there are no studies that offer models that would uncover the relationship between the LD rates and the contract sizes so that the LD rates might be justified. This work addresses such gaps in the body of knowledge (BOK) in LDs. With emphasis on the working-days (WD) LD rate schedules, the objectives of this work are to characterize the LD rate schedules across the states and to model a formula(s) that would represent the relationship between the WD LD rates and the contract amounts. The data set for the work represents the LD schedules in the standard specifications of all departments of transportation in the United States. Descriptive and cluster statistical analyses were used for the LD rate characterization. For model development, several linear and nonlinear regression models were employed. The results highlighted considerable LDs variability in the smaller contract sizes and exceptional LD rates stability in the larger sizes. Despite the economic differences among the states, it is found that the LD rate is, on average, 0.02 ¢/$ for projects $20 million or above. Below that, the rate increases between 0.03 ¢/$ and 0.18 ¢/$ until the contracts reach $750,000. LD rates tend to decrease sharply with the increase in contract sizes, forming an L or reverse J shape. This pattern proved complex, and only nonlinear regression with transformed variables successfully modeled it. Credible models were obtained after satisfying the least-squares regression assumptions. The work contributes to the BOK by adding a new statistical dimension to understanding LDs and developing regression model(s) that explain the relationships between the LD rates and the contract sizes. The work should help SHAs create, evaluate, and justify their LD rates. [ABSTRACT FROM AUTHOR]

As a matter of course, the private party in public–private partnerships (PPPs) assumes the responsibility for roadway safety management (RSM). However, because most PPPs are performance-based, public highway agencies must articulate the specifications and methods they develop to enforce RSM practices. Despite the increased interest in PPPs in recent decades, little has been published on developing and propagating the RSM practices used with this delivery system. To fill this research gap and explore RSM practices in PPPs, this work took a synthesis research approach, using content analysis to critically review and analyze 16 PPP agreements in seven states and provinces leading in PPP contracting in North America. The study discovered several methods and organized them under five mechanisms: Mechanism 1, integrating roadway safety into project performance specifications and initiating new tools such as safety compliance orders; Mechanism 2, imposing nonconformance monetary deductions based on point and classification systems; Mechanism 3, regulating safety payments on the basis of crash statistics; Mechanism 4, promoting safety initiative programs; and Mechanism 5, enforcing administrative countermeasures such as work suspension and default/termination triggers for persistent developer noncompliance. Mechanisms 1 and 5 were the default mechanisms in all toll- and availability-based projects, whereas Mechanism 2 was common in availability-only projects. The research reviewed the RSM packages in the PPP agreements, elucidating the particulars of the RSM mechanisms, highlighting RSM design considerations, presenting implementation guidelines, and articulating research needs. The research results were validated against PPP highways in five other states and provinces. This synthesis research provides highway agencies with an extensive practice review to support RSM package design for future PPP projects. [ABSTRACT FROM AUTHOR]

Two common approaches have been used by governments for the implementation of public-private partnerships (PPPs): a finance-based approach that aims to use private financing to satisfy infrastructure needs, and a service-based approach that aims to optimize the time and cost efficiencies in service delivery. The implementation of PPPs, however, may suffer from legal, political, and cultural impediments. In the United States, the federal government enabled a number of acts to ease the impediments and promote PPPs for infrastructure development. Based on a detailed analysis of PPPs in the United Kingdom and British Columbia, Canada, this paper describes principles that would characterize the implementation of PPPs at the program level (e.g., whether the implementation is successful). The principles pertain to the: availability of a PPP legal framework and implementation units; perception of the private finance objectives, risk allocation consequences, and value-for-money objectives; maintenance of PPPs process transparency; standardization of procedures; and use of performance specifications. Guidelines for successful implementation are explained and discussed in the context of the United States PPPs experience and impediments. [ABSTRACT FROM AUTHOR]

Economic modeling and risk analysis are important processes for the appraisal of infrastructure and revenue-generating projects such as build-operate-transfer (BOT) projects. These processes have been commonly implemented using spreadsheets in which the analyst would build several models to analyze a project under varying conditions and risk assumptions. For better efficiencies in building economic structures and evaluation of projects, the current paper defines “classifications” of estimating and cash flow methods, and develops a generalized model. A classification represents a particular domain—construction, revenues, financing, operation and maintenance, or risk analysis, for example—and holds the estimating methods of that domain. The basic building block behind the model structure is a work package/stream that would have its own properties and estimating methods by direct selection from the relevant classification. By integrating the building blocks together a project economic structure is built and various performance measures are formulated. The model was implemented in a prototype software system called Evaluator. A BOT highway project is used to show an application of the concepts and the generalized model. [ABSTRACT FROM AUTHOR]