Use of a Hybrid Bidding Method for Costs and Risk Reduction in Highway Construction: Fid-Bau Portal

Use of a Hybrid Bidding Method for Costs and Risk Reduction in Highway Construction

Fontán-Pagán, José J. / González-Quevedo, Sergio L. / González-Quevedo, Antonio

Highway infrastructure projects are characterized by change and extra work orders which result from the uncertainty in the quantities of particular items. These items are specifically related to earthwork, where earth movement amounts are affected according to the excavation depth and soil type. The unit price contract is used to control discrepancies in quantities presented during construction, however, many of items can be precisely measured from the plans and specifications like traffics signs, concrete pavement and safety barriers. The hybrid bidding method called “CHICA” is a system which integrates a unit price contract with a lump sum contract to create a unique mixed contract. Setting unit prices for items with uncertain quantities and lump sum for items with precise known quantities, and incentives for early completion could produce reductions in extra costs, and reduce change and work orders, risks, and time. This research presents a comparison between the hybrids contracting method used in the second phase of construction of the highway PR-66, with the traditional unit price contracting method used in the first phase of construction of the same highway. The research demonstrates a significant reduction in costs, change orders, extra work orders, and time when using the hybrid contracting method in this particular situation which suggests that CHICA has great potential.