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Time-Related Incentive and Disincentive Provisions in Highway Construction Contracts (2010) / Chapter Skim
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Chapter 3 - Estimating Incentives and Disincentives
Pages 24-26

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From page 24...
... However, since I/D rates derive their justification from RUC, and adjustments to the I/D rate for market influences are less precise than RUC estimates, consistency should trump market influences when a conflict between the two arises. • Capping the total incentive provides a level of risk mitigation to the STA to protect against grossly overpaying for acceleration.
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From page 25...
... Similarly, coupling lane rental provisions with I/Ds for milestones or overall project completion may also expose the contract participants to double dipping on RUC impacts. Best practice would dictate that I/Ds for critical project phases should be offered individually based on the RUC impacts of each phase.
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From page 26...
... Also, RUC factors should be based on proper assumptions regarding AADT, percent of traffic by vehicle type, vehicle operating costs that reflect current CPI adjustments, and hourly RUCs that have been adjusted for personal/business trips and average vehicle occupancy. Failing to correctly estimate RUC impacts may render an I/D provision unenforceable.
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Key Terms

  • ruc estimates
  • travel time
  • road user
  • estimating ruc
  • ruc impact

  • time delay
  • highway construction
  • operating costs
  • market influences
  • vehicle operating

  • construction project
  • vehicle type
  • capacity estimates
  • total ruc
  • multiple ruc

  • user costs
  • estimating road
  • average vehicle
  • user cost
  • vehicle occupancy

  • environmental costs
  • delay costs
  • user delay
  • estimated using
  • delay due

  • impact due
  • complex projects
  • calendar days
  • eastbound traffic
  • similar ruc


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