Buying, leasing or renting: now is a good time to work an equipment deal using one, two or all three in the mix.

By Mike Anderson

Before even addressing the options available to their customers, construction equipment financiers are just relieved to have customers to speak with, given the turtle-like crawl of the market the past two years.

And that leads to good opportunities right now for those earth movers and road builders ramping up to add to their fleets.

“If you have the need for construction equipment, you have good options in all three channels – in rental, leasing and long-term financing,” says John Crum, senior vice president of Wells Fargo Equipment Finance’s construction division. “It’s a good time to be thinking about what to do with your fleet right now, because you do have these options available to you … and the cost of capital is down.”

With 12,000 U.S. customers in the defined infrastructure space alone, Wells Fargo deals “from the equipment manufacturer down to the guy who’s putting the stone down on the roadway,” says Crum. “It’s a core industry for us. We do hit three channels – we go to the manufacturer space, to the dealer space and then direct to the end-user space – and we think that provides us a degree of diversity. And then the national and Canadian coverage gives us some geographic and regional economic diversity as well.

“There’s certainly money available from us, and we don’t lack competition. We’re seeing more lenders get their legs underneath them a little bit,” he says, “and I think a lot of people feel generally that while the fog isn’t totally gone, it is starting to lift. People are starting to feel a little moreconfident, both from a lender’s and an end-user’s perspective. End-users are starting to think about the composition of the fleet.”

Among that competition Crum refers to are the major manufacturers of theactual equipment financed by Wells Fargo and other independent financial services companies.

“Business in the core construction segment is definitely starting to pick up, and that’s a great sign,” says Ben Norris, vice president of financial services and treasurer for Komatsu America. “Whether that means we’ve found a firm bottom and people are getting their feet back under them again and are ready to run, or there actually are some signs of a true recovery, I’ll leave that to the economists. But the key point there is things have stabilized, demand has picked up, we’ve got our plants in the U.S. back at work and producing machines, and there are pockets of real good activity out there,” says Norris. “As a captive, we never went anywhere. We were strongly supporting our dealers, strongly supporting our end-user customers, and never did face a financial or banking crisis. However, the backdrop of the market was such that those forces were very real.”

According to state filing results compiled and projected by Equipment Data Associates [a Randall-Reilly company], based on Uniform Commercial Code (UCC-1) financing activity, the total of new and used machines for March surpassed the 10,000 mark for only the fourth month since 2008.

“Our doors are open,” says Well Fargo’s Crum. “We lent a lot of money yesterday, we’ll lend a lot today, and we’ll lend a lot tomorrow.”

Choices, Choices

So, you’ve finally gotten some work ahead of you. Now you need some gear, maybe a couple of full-size excavators, a wheel loader, four articulated dump trucks, a pair of rollers and a paver.

“We’re at a particular point in the business cycle and the economic cycle where rates are very advantageous to a contractor to go out and put some long-term financing in place right now.

At the same time, with manufacturers wanting to sell their products, there are also manufacturer-sponsored

programs that are offering some really attractive finance and lease options out there as well. It’s a good time to do all.

— John Crum, senior vice president of Wells Fargo Equipment Finance’s construction division

You, too, have choices. And while different companies and different manufacturers may offer similar wares, they are not by any means all alike, which means you need to ask a lot of questions. Assuming one manufacturer or bank offers a carbon copy of their competitors’ bill of fare is a mistake that could leave you unaware of a option that fits you better.

As vice president for U.S. construction financial services for one of those major equipment manufacturers referred to earlier, Mike Rankin can lay out a number of options. “Volvo Financial Services offers a full spectrum of finance and lease offerings, including flexible loans that can be customized to customer business needs and resources, special program offers and competitive rates,” says Rankin, citing such options as accelerated payments, skip or seasonal payments, balloon payments and simple interest loans. “Unlike some lenders, Volvo Financial Services does not penalize customers for paying off all or a portion of their loan before it’s due. Volvo Financial Services also understands the cyclical nature of the construction industry and will work with customers to design a plan that matches their cash flow, with terms ranging from 24 to 60 months.”

Among the benefits of a loan for the customer, says Rankin, are the actual ownership of the asset, the quick building of equity, and the tax depreciation with no hour limitations or return conditions.

“It’s interesting,” says Komatsu’s Norris, “because leasing gets probably more press, but the cornerstone customer in the U.S. and Canadian market still likes to own their core fleet, and then they’ll add to that core fleet through rental or leasing packages that are available.

“There are benefits to ownership, unless you overdo it. Our friends at the IRS still allow accelerated tax depreciation, so unless you overbuy, or are in a situation where you are being penalized for too much benefit if you will, there are still some advantages to owning that machine,” says Norris. “I think customers like the uncertainty removed from any transaction. If they can get the machine they like and their operators are happy with, they’re familiar with the product line, and they trust and have a good relationship with the distributor, it does make a great deal of sense to buy. And then as you want to add to that fleet, perhaps do it through leasing or in many cases just rental.”

With its Fair Market Value, Fixed Purchase Option, Finance and Options Plus leases, Volvo Financial Services offers leasing products that provide a variety of turn-in options, says Rankin.

The exit window, explains Komatsu’s Norris, is an advantage to leasing for the customer. “With a good track record and credit profile, you can get into the machines for lower up-front costs, perhaps match those machines up with a job or a duration of a job or project, and then when that project is over, you may still choose to purchase the equipment or you may decide, ‘OK, I’ll give it back and look for the next opportunity.’ ”

At Wells Fargo, Crum notes “significant movement” of customers to a third route as they consider how to add equipment. “The activity is much more heavily centered right now than it has been in the past on the rental side of the business,” he says. “Our end-user contractors are telling us that the first move they’re making as they’re getting some more work and looking at their fleets is that they’re going to rent in the second and third quarter this year, and then maybe make the long-term decisions in the fourth quarter. And dealers and manufacturers are also reporting significant increase in demand on the rental side of their business. For the dealers, their rental fleets are having very strong utilization right now, to the point where a number of dealers are looking at adding to their own rental fleet to meet the demand. Ultimately, the hope of the seller of equipment is that they will then convert that rental to a purchase at some time later in the year or next year.”

Again, flexibility is a carrot for end-users. “They can use the equipment for a period of time, and can then decide on what they want to do at some point in the future,” says Crum. “A lot of traditional dealers will allow them to apply some piece of their rental towards a conversion price of the machine, if they choose to do that. I think, just right now, people are at the stage that they want the flexibility that if it doesn’t work out long-term, they can return the equipment really at any point to the traditional renting dealer without any long-term obligations.”

Secondarily, he adds, dealers and rental companies wanting to put the machines in their fleets to work are keeping rental rates competitive right now.

Sums up Volvo Financial’s Rankin: “Blending of the options is often a smart move as it allows the customer to address specific needs for the various types of equipment on a big job and optimize profitability.”

Doing the Deal

Much like the equipment they use, where to find the money for that equipment may involve digging into different pots, in different locations. After all, a guy who operates nothing but Brand C excavators may just have a preference for Brand D backhoes, right? Then again, when it comes to finding the money, that may not matter.

“That customer, maybe more than ever before, is, to the extent they can get it, looking for kind of a one-stop shop,” says Norris. “That’s where they want that dealer to be able to provide solutions that meet their total business, and not have to do an a la carte type of solution.

“As Komatsu Financial, we’re very interested in helping our dealers and their end-users be successful,” he says, “and so we will finance on occasion some non-Komatsu product when it’s included in a package of our own. But we stop short of doing other manufacturers’ product on a stand-alone basis for obvious reasons. We are not an independent commercial finance company; we’re first and foremost to support our product line and our dealers.”

Step right up then, Wells Fargo’s Crum urges end-users, the overwhelming majority of whom his company serves are from the private sector. “The conservation of their working capital is the biggest thing,” he says. “We’re at a particular point in the business cycle and the economic cycle where rates are very advantageous to a contractor to go out and put some long-term financing in place right now. At the same time, with manufacturers wanting to sell their products, there are also manufacturer-sponsored programs that are offering some really attractive finance and lease options out there as well. It’s a good time to do all.”

Doing all today, says Norris, includes a heavier consideration of used equipment. “For our types of products, the obsolescence curve is very long and very flat,” he explains. “If it still moves dirt or moves down the highway, there’s value there, and I think you’re seeing that today in used equipment. There’s been some real interest in used machines, just because of that price-to-value ratio and a little bit less uncertainly. Customers are more willing to commit and have to deploy less capital.

“This may be a function of the economy as well, because many of the folks in our space have gotten a great deal of machines back, and you have to work that back through the traditional channels,” says Norris. “You’re certainly seeing that through not only the other captives, but commercial finance companies and banks. Unfortunately a lot of businesses failed and a lot of iron had to come back and is still in the process of being moved through the pipeline. Until that has run its course, it’s going to be a little bit harder from the manufacturer perspective or dealer perspective to convince customers that they want to ignore half of the bell curve and only look to buy or rent new products.”

Whether a company makes the equipment or not, it definitely has a wicket at the proverbial bank for equipment users, says Norris. “From a capital market or pure treasury perspective, we love other financial institutions to have interest in our industry and our space,” he says. “It’s a very capital-intensive business; manufacturers require capital, dealers require capital and the end-users require capital. Informed market participants who want to engage funds, we’re happy to talk to and in some cases even point them in the right directions. Unfortunately, what you get sometimes is the cyclicality of our industry will attract participants during some periods, and at times others will run for cover when things get tough.”

Despite the recent struggles, the construction industry retains “attractive features for us as a lender and lessor,” says Well Fargo’s Crum. “One of the reasons why this is a core business is because it is a very capital-intensive business. There is the need for the kind of service that we provide, which is capital, either in the form of capital to the dealer or capital to the end-user.”

Step right up, indeed.v

By Mike Anderson

With lights brightening up the work area immediately around it, this Vision 5203-2 wheeled paver from Wirtgen Group’s Vogele brand completes night paving tasks on the Massachusetts Turnpike/Interstate 90.

Working all night” may sound like a long, drawn-out sentence for anyone punching a clock. For a paving crew, it’s anything but, warns veteran industry trainer Terry Humphrey.

Always a critical factor in construction success, time management is even more so when paving at night, says Humphrey, a retired Cat Paving training manager now serving the company’s dealers and customers as a vendor-employed training consultant. “Night paving always has a requirement that we lay a certain amount of tons in a prescribed amount of time,” he explains. “Traditionally, during the daytime, we would think about, ‘Well, I’m going to lay 2,000 tons in this shift; it may take me eight hours, it may take me nine hours, but I’m going to lay 2,000 tons.’ At night, you’re planning maybe to lay 2,000 tons, but you have a fixed starting time and a fixed stopping time. So, time management on the paving process is a big difference.”

His advice? Plan, plan, plan! “You just cannot lose time,” says Humphrey, “because you’ve got no way to make it up in the middle of a shift. The time management gets tougher at night, for sure.”

Having been put to practice in various parts of North America for 30 years now, night paving is established, continually expanding, and certainly not going away, says Bill Rieken, paver applications specialist with equipment manufacturer Terex Roadbuilding. “It’s just a reality we’re in. With the traffic loads we have today, a contractor’s going to have to plan on night paving,” he says. “Even here in the Midwest out on the Interstates, we’re paving at night.”

Balloon lights, like these attached to pieces along the paving train, are earning thumbs-up responses for their ability to brighten jobsites at night without the glare associated with harsher lighting sources. This Vogele Super 1800-2 tracked paver is working on Highway 99 near Fresno, California.

Paving contractors, when working at night, need to have their ducks lined up even more straight than normal, concurs Rieken. “You’re on and off the road in a certain timeframe, so you’ve got to make sure all your equipment’s working properly and that you don’t have breakdowns,” he says, “and that you’ve got a plan in case there is a breakdown. You’ve got back-up equipment; you’ve got something in place to deal with whatever might happen on the jobsite, so that the traffic is opened back up on time. Usually there is a time deadline: by 6 o’clock, 7 o’clock or whatever it is, you’re finished your work, you’ve cleared your cones and the lanes are opened up.”

Or else you pay, says John Sunkenberg, a road industry product competency manager for Volvo Construction Equipment. “Because there are traffic constraints that have triggered this to be a night paving job, there’s usually a time constraint when you have to get off the job. So if a piece of equipment is down, or something else is down, you’re going to start getting fined a big fine hourly if you’re not off the road in the allotted amount of time.”

To accomplish all that’s required in a night shift, “job management is critical,” says Rieken.

Worth repeating. And repeating.

Humphrey makes no apologies for being a broken record: “Planning, planning, planning,” he stresses.

“Traffic control is a huge problem with night paving, because it’s most always urban paving, specifically a multi-lane situation where you’ve got live traffic in the same direction as the paving crew,” he says. “Traffic control is totally different at night because of the lack of visibility. The key is pre-project or pre-shift safety meetings that explain to everybody where traffic is going to be at all times: which lanes are closed; which lanes are open; how close will the traffic be to the cones or the barricades that are set up. Communication about safety becomes even more critical at night.”

When it comes time to lay material, “we can’t afford to make any mistakes, because of this time thing,” says Humphrey. “Everybody has to be a little bit more vigilant at night, and it starts at the plant. We don’t see as well, we’re not going to see defects in the material, so the plant really has to have excellent quality control at any time but at night it’s even more critical. We have to be able to depend on that mix coming to us the same, truck after truck.

“At night, you’ve got no time to recover from mistakes.”

Among the “over-planning” or preparing for contingencies Humphrey recommends for consideration is an extra truck or two to avoid unnecessary waits. An extra roller may be needed, too. “Because the ambient temperatures are different at night, in other words it’s cooler at night, the mix is going to compact differently,” he says, noting the need for quicker compaction of the faster-cooling material on a night Superpave project. “Instead of having one compactor, you probably need two compactors ahead of the tender zone.

“When I work with the crews at night, I do cooling curves that tell me how long I’ve got before the mat cools to a certain temperature. That tells me: if I’m paving this wide, laying this many tons, I need this many compactors. It’s just getting information, and sharing that information, because the plan you make at night is different than what the crew is used to doing during the day.”

Be it an extra dump truck or a well-stocked service vehicle, having extra resources as a contingency is a key to successful night paving. As one equipment industry professional put it, “stuff’s just not available at 2 o’clock in the morning that is at 2 o’clock in the afternoon.”

At the paver itself, “it’s mainly the visibility issue,” says Humphrey. “The mix goes through the paver the same way, grade and slope control operates exactly the same way, it’s just that people can’t see as well. For example, the operator may not be able to see his steering guide with we’ll just say conventional balloon lights on a paver. We may have to take a separate light – a spotlight – and focus it on the steering guide, so that the operator can clearly see that when matching a joint.

“We may also want to have a light that shines directly into the auger chamber, so that the screed operators can clearly see the head of material. They’re trying to control that to cover one-half of the auger and fill-in in front of the extension to make sure there are no voids,” he says. “Typically, that area is kind of dark even with conventional lighting, so a spotlight in that area is very helpful.”

It’s always a challenge, says Volvo’s Sunkenberg, for equipment manufacturers to keep up with lighting requirements that vary by jurisdictions. Or, as Humphrey puts it, “sometimes the local requirement for lumens actually gets in the way of clear visibility.” Personally a fan of the inflatable balloon lights that can be attached to the paver or stand alone, Sunkenberg has seen scenes throughout the country that range from a single light fixed to a paver, to long rows of portable lights stretching many thousand feet up and down the road, to ballasted high-intensity “warehouse” lights literally blasting harsh brightness onto the job. “I’d say more often than not, contractors are building their own, customizing their own,” says Sunkenberg, whose company does offer a lighting kit for its paving equipment.

He doesn’t sell balloon lights, but Terex Roadbuilding’s Rieken is likewise a fan, “because they are so easy to attach to the paver, they don’t glare and they just light the world up. They inflate when you plug them in, and I just think they’re slick,” he says. “I don’t have any stock in them, I don’t sell them; I just like them. I just think they provide a really good lighting system on the paver itself. With other lights, you’ve got to be careful how they are aimed, so that they don’t create a glare, not only for the people on the jobsite, but for anybody driving by. The balloons light the world up without that glare, so I’ll give them a plug,” adds Rieken, specifically mentioning the Airstar brand of balloon lighting products.

“The facts that balloon lights are glare-free, shadow-reduced, portable and that they spread their light all around in a 360-degree circle make them so popular,” says Ingmar Hansen, vice president of Powermoon Enterprises Ltd., a company which offers a line of modified balloon products. An “umbrella system” is designed to prevent the Powermoon lights from accidently deflating, says Hansen.

Along with the more uniform heating of the new electric screeds available on pavers, “there’s power on board at the paver to light the world up around the paver itself,” says Rieken. “We designed ours knowing there would be a lot of night paving going on. The rule of thumb is that it takes about 1 kW per foot to heat a screed, so on our Stretch 20 screed we have a 34-kW genset. So, you can add extensions and go wider, up to 26 feet if you choose, but still have plenty of kW left to have the lights on at the same time you’re heating the screed.”

Especially when working with high-intensity lights, the powering of lighting systems at the paver is an issue that equipment manufacturers have had to deal with, says Volvo’s Sunkenberg. “We need a very stable, consistent power source, which on a machine is difficult because you have horsepower fluctuations, or the engine lugs down, or you have hydraulic surge and hydraulic delays. It’s certainly a challenge from an equipment standpoint,” he says. “Our highway-class machines have outlets as standard equipment. You can boast that you’ll plug other things other than lights in there, but 99 percent of the time that’s what they’re there for. Occasionally, a guy will plug a power drill in because maybe he doesn’t have a service truck right there and he’ll use the paver outlets for alternative power, but it’s really for night lighting.”

Man with a plan

Saving a few minutes a few times over a night shift is really what the intricate planning Humphrey espouses is all about.

Case in point: “Vibratory compactors typically will need to resupply the water spray system once during the shift. If I’m going to refill the water spray system in, let’s just say, five hours, I want to know where I’m going to be on the project five hours from the start, and that’s where I’m going to have my water truck waiting,” he says. “I don’t want to need to have somebody run back to the start of the job and bring the water truck up to that point. I want to have it there already. It’s a small detail, but maybe that saves you 10 minutes. Those are the things I’m talking about – this planning, planning, planning.”

Not only adding a truck or two to the job cycle, but when to have them can be a timesaver, says Humphrey, citing a three-lane paving job in which the high-speed lane is paved for 1,500 feet, the crew then picks up, backs up and completes the middle lane for the same distance, and then ditto for the right lane. He calculates that 18 trucks hauling an average of 22 tons are going “to get me this distance. What I’ll try to do is make sure that I’ll have those 18 trucks show up to me in a tightly staggered pattern, so that I don’t have any stops – zero stops – especially during that first lane pull. I might gain a little bit on my production the first pull. I’m really going to try to plan that I have enough trucks to get me through that first pull without ever having the possibility of a stop.”

The theory, says Humphrey, is to get through the first third of that particular phase of the project in less than one-third of the phase’s allotted time. “I balance plant output, trucking, paving speed and compaction, so that in that first pass, I can go as fast as I can get the mix to it, without stopping and without outrunning the compactors. Then I’ve got myself a little breathing room moving forward.”

The vehicle volume factor

Ironically often the political reason for paving at night, reduced traffic, actually represents an advantage to efficient night paving, “because the traffic is what really hinders continuous paving,” says Terex Roadbuilding’s Rieken. “During the day, you might have a plant that has sufficient production, you might have adequate trucks, but the traffic still might hinder the flow of trucks to and from the jobsite, so the night paving if anything probably lends to the success of the continuous paving process, because there is less traffic.”

Says Humphrey: “The paver itself doesn’t care how fast you pave, as long as you’re consistent and don’t have long stops … and the compaction process can match you. So, you plan all that before you go to work. You make the calculations.” Adds Sunkenberg: “If you’re on a continuous paving job at night and the paving train stops, they’re upset, because the profilograph will pick up a stop and it will count against their final score and will ultimately cost them money.”

On the con side of the night paving equation is increased cost, says Rieken. “To ensure the safety of the paving crew and the operation, and of the people driving on the road, it takes more people, more equipment to make that happen, so there is a cost incurred that would probably be the biggest downside of doing it at night.” Which leads to another suggestion from the veteran trainer Humphrey: “Fatigue plays a huge role in night paving. I’d suggest trying to figure out a way if I can overstaff by one person. ‘Can I give people a chance to actually stop work for a minute, get a cup of coffee and stagger out a little bit, so they don’t get quite as fatigued, lose their focus, because that’s when mistakes happen?’

“If you have a long night project, I think you’re almost better off having one crew doing it instead of switching crews on and off nights,” says Humphrey, “so they might have a chance to acclimate to working at night and resting during the day.”

A safe work environment – and Sunkenberg has worked with night paving contractors who ensure reflective tape is wrapped around anything and everything on site – is the only thing that ultimately matters, says Humphrey.

“The residents, the business owners, nobody likes to have construction going on,” he says. “I’m not too sympathetic to that.

“We have to be able to see out there … and we’re going to make a certain amount of noise.” v

Auctions not only offer lucrative tools for asset management, but also perhaps even professional partnership in conducting your equipment business

By Mike Anderson

It may be April Fool’s Day, but the movement of construction equipment on this day is certainly no joke.

April 1, 2010 is, after all, a Thursday … and that means iron users, sellers, buyers and speculators from Lima, Ohio to Lima, Peru, from Dubuque to Dubai, are watching their computer screens flash back at them every time a member of their industry brethren clicks a new bid on a ripper-equipped chunk of earthmoving beef otherwise known as a 2002 Caterpillar D8R II dozer. The granddaddy of Internet equipment auction companies, IronPlanet hosts a live “Featured Auction” at least each Thursday, when hundreds of excavators, wheel loaders, pavers, dump trucks and other types of construction equipment, attachments and parts are up for bids. For mainline pieces of equipment, generally anywhere from seven to 10 are opened for bids at once, every six minutes, and each machine will stay on the board at a minimum until the next group goes live. Popular equipment will stay up for 15-20 minutes. The Texas-based Cat D8R II, requiring an opening bid of $110,000, stays open for bids for 24 minutes, drawing 39 bids, topped off by one for $174,000 by a bidder in Mexico.

“What we generally like to tell our customers, large and small, is that because IronPlanet does auctions every week, we can tailor the time of asset disposal to their needs, instead of forcing them to do it on our timetable,” says Paul Hendrix, IronPlanet equipment pricing analyst. “If a guy has a job completion on April 1, and the local traditional auction company doesn’t have another sale for 90 days, why would you want to have those assets sitting idle for 90 days? Or, as a job completion is progressing, with IronPlanet you could even sell three or four pieces this week, and five or six pieces in two weeks.”

That sure sounds like asset management.

Indeed, once most often considered among the “rogue” businesses of the equipment industry, auction companies are increasing part of the fleet management professional’s arsenal of tools … and perhaps even among his most trusted allies, advisors and confidants.

“Tuned in” fleet managers

A more informed market is a better market, says Ritchie Bros. Auctioneers’ Peter Blake, who credits private and public fleet managers alike for being “tuned in” to both the ever-changing status of their assets and the factors that affect the value of those graders, rollers and trucks. “People are just getting a whole lot smarter, with both more data available and more ability to assemble the data to make better decisions to help manage their businesses,” says Blake, chief executive officer of the world’s largest industrial equipment auction company. “People are starting to look a little more objectively at their fleets and making sure that they are getting the return they need and, if they are not, then what are their options.”

“Ours is very much a relationship business,” says Ritchie Bros. Auctioneers chief executive officer Peter Blake, seen here working the auction crowd himself. Sharing data with Ritchie’s customers only helps those equipment owners and managers make value-enhancing decisions on assets, he explains.

This, says Blake, falls right into the “mitt” of Ritchie Bros., the Vancouver-based worldwide auctioneering behemoth, which in 2009 alone sold close to 283,000 lots – or items – from 37,000 consignors, generating about $3.49 billion in gross auction proceeds. The company held 195 unreserved industrial auctions at sites in 14 different countries, drawing more than 330,000 bidder registrations, both on site and via the Internet. On-site and online registrants alike bid live on the gear that rolls across the famed Ritchie ramps.

“The one thing that we have always said internally here is that we don’t really control or perhaps even influence the issue of when somebody wants to sell something,” says Blake, pointing out that factors to be considered by sellers include equipment utilization and replacement. “For us, our job has always been the awareness that, if someone wants to sell something, then we are an option for them to utilize.”

For veteran industry observers Donnie Wiggins and Fred Darnell, the equipment auction as a tool for fleet management professionals has evolved from primarily a place for manage’s to disperse of assets. “On the acquisition side, I definitely think they look at auctions now more than they have in the past,” says Wiggins, general manager of Top Bid, a Randall-Reilly* business that publishes assorted traditional and online industry reference materials. The key is having buyers who have work ready to start, says his colleague Darnell, crediting the combination of a buyer’s immediate need with the availability of quality late-model used gear – the latter being what auction companies espouse in this era of reduced production of increasingly costly new equipment. “When somebody needs it, they are going to pay for it,” says Darnell, regional sales manager with Top Bid.

While setting up his table on site at a recent Louisiana auction, Darnell was repeatedly approached and queried about what he as an independent observer was estimating a specific piece would sell for that day. “There were four or five people there who undoubtedly had an upcoming job and needed that one particular piece of equipment. And they needed it right then,” he says. “How many people who are at the auction or on the Internet who need a particular piece of equipment or more for a particular job, that’s what’s going to determine your value.”

In this regard, the realms of the old-school auction yard and sit-at-my-desk Internet bidding are one in the same. “The very first guy who puts a bid on that piece, he owns it. Even if it’s for 30 seconds, he owns it,” says IronPlanet’s Hendrix. “We found that the more people we get on board with that little fleeting sense of ownership, typically the better the end result is. That’s just a market mentality, an auction mentality, that’s been going forever.”

The primary goal for equipment managers is uptime – having the machines available for work exactly when they are needed. To that end, traditional and Internet-based auctioneers agree, the auction’s the place to be. If you’ve got the work, the auction company will get you some quality gear, pronto!

As the chief executive of the industry’s largest traditional auction company, but an organization that has also embraced the Internet to leverage an increasingly international marketplace for North American-sourced equipment, Blake likewise says he can’t emphasize enough the role that pride plays for those equipment sellers and buyers who look to Ritchie Bros.

A sense of pride

“You have to keep in mind that when someone is selling that piece of equipment at the auction he is saying goodbye to it, but there is another person there who is saying hello to it. That’s a brand new piece of equipment in that new person’s fleet, and there’s a sense of pride that you just can’t measure,” says Blake. “That’s why the guys want to come and inspect and test the equipment. These are income-producing assets, but they have the guys’ names on the side of them as well.” Equipped with “sophisticated business acumen,” these equipment owners and managers have a very real understanding of their assets.

“Business is run today based on more information, transparent data, a global market view … and really these are things we’ve been talking about since Dave Ritchie and his brother started the company in 1958.”

The philosophy may not have changed in the past 50-plus years, but some of the tools have.

“That connectivity of the Internet world and the real world – that coming together – has been a real positive for us,” says Ritchie Bros.’ Blake. “You’ve got data at hand now that you can help your customers manage their fleets all the better, and the transparency of information out there is exactly what we’re all about.”

On the eve of this April’s launch of an updated website with additional customer services, Blake noted that www.rbauction.com drew 2.8 million unique visitors in 2009, during the worst recession since The Great Depression. Those visitors made 30 million inventory searches, up from the “low 20 millions” made by 2.2 million unique visitors in 2008.

“What we’re able to do is look at the level of interest on various kinds of product, including where that’s coming from and how that measures up,” says Blake. “It’s a pleasure to be able to provide even more information to some of our customers who need it and use it, and help them run their businesses better.”

There is more partnering happening between fleet managers and auction companies, agrees IronPlanet’s Hendrix.

“We tout it every time we walk into a contractor’s office: Faster time to market. We allow you the flexibility of putting out a piece on your timetable instead of forcing you to dance to our music.

“That last leg of the equipment management stool – the asset disposal part of that – over time has been a little bit of an afterthought. Now, there’s a lot more thought going into that from the very beginning, from the time they buy the asset, through the management of it,” he says. “Take the life cycle of a dozer, for instance, says Hendrix. If a fleet manager has to replace the machine’s undercarriage before auction, he’s probably spending any potential return he’ll get on the piece. By acting sooner, both he and the buyer can win. Advises Hendrix: “Plan so that you can sell that dozer where it’s got anywhere from 30- to 50-percent of the undercarriage on there, so that the guy who’s purchasing that realizes that he doesn’t immediately have to go and capitalize an expense on a machine he just purchased at auction. He can immediately take it a job and go to work with it without having to worry about a large undercarriage expense. On the other hand, you have received some benefit from the expense that you have put into it,” says Hendrix, whose history prior to IronPlanet includes in the traditional auction business and at the equipment dealership level. “This is a real management and real timing issue with equipment managers.”

Set your own pace

With the weekly live unreserved Featured Auctions and the ongoing reserved Daily Auctions offered by www.ironplanet.com, “you can time it with us,” says Hendrix. “You can sell that dozer this week because it’s ready. And you can sell another dozer a month from now or two months from now whenever it’s ready. You can trickle the stuff in.”

IronPlanet’s Featured Auctions operate “much like the traditional auction business does,” he says. “Everything sells on that day. It’s an absolute auction: We don’t allow any minimums; we don’t allow any reserves. There is a sense of urgency about the sale of that piece. Every buyer knows, every potential buyer knows, that piece is going to sell that day.”

This service works well for commonplace equipment types and makes, be they Case 580 backhoe loaders or John Deere 724 wheel loaders or Komatsu PC300 excavators, all examples of machines that are operated in most if not all applications and geographical markets. And later-model gear is bringing very good money right now,” says Hendrix.

As part of a giant Featured Auction held March 25-26, six-digit sales were literally jumping off computer screens worldwide. A 2007 Komatsu PC400LC-7E0 excavator based in Maryland drew 54 bids over 16 minutes, before selling for $170,000 to a bidder in Quebec. A 2006 model of the same machine, based in Georgia, sold for $122,000 to a buyer in the United Arab Emirates. Four 2007 Caterpillar 345C L excavators based in Ohio sold for $152,000, $168,000 $162,000 and $168,000 respectively: three went to Tennessee; the other, one of the two top money draws, to Colombia in South America.

If the asset’s “clean and ready to sell,” the process from the seller contracting IronPlanet to that seller receiving his money for the asset runs 45-55 days. This includes equipment inspection, processing, report uploading and posting for usually at least two weeks of online previewing, actual auction day, and then payment within two weeks of sale.

“We allow you the flexibility of putting out a piece on your timetable instead of forcing you to dance to our music.”

Iron Planet’s Paul Hendrix

Particularly for but not restricted to more specialized equipment types, such as curb-and-gutter pavers, material transfer vehicles and crushing plants, the Daily Auction route is an alternative IronPlanet has offered since the early days of the Pleasanton, Cal.-based company’s arrival more than a decade ago. These pieces stay open for bids for week-long intervals, and the seller has the right to place a reserve bid. If the reserves aren’t met or beaten, these pieces don’t sell. “They have a smaller community of buyers typically and they have a very high initial cost, so it tends to make the owners a lot more nervous about the outcome of the auction,” says Hendrix.

Daily Auction pieces will often reappear, having not met their reserve bid the first time around. With Daily Auctions, the amount of time a piece is on the IronPlanet site and available for bids allows the seller to leverage both the site’s traffic and members of IronPlanet’s inside sales group, who will notify potential buyers based on past bidding activity. Sometimes, an item that starts out for bids in Daily Auctions, yet did not hit the reserve level, will find its way into a Featured Auction. “They’ve run it in the Daily Auction for a period of time and didn’t get enough activity, and they were motivated to sale,” explains Hendrix. “They’ve been watching our Featured Auctions. And, ‘With the traffic you guys are getting , with the number of viewers you are getting, I’m just going to roll the dice and put it in there anyway and take what it gets.’ ”

And traffic these days is good. When the last piece was sold in the April 1 Featured Auction, the attendee counter had hit 10,744. A week earlier, on the opening day of the two-day sale, the count was 14,432.

For Ritchie Bros., which has often held multi-day auctions, a new service being introduced strategically and methodically at locations throughout the world will make two- and three-day events much rarer in the future … and, says Blake, make more efficient use of time for already overworked equipment owners and managers. Typically small pieces including attachments and parts, items in the new Timed Auction are available for bids throughout the day of the live auction, while the big rolling iron still chugs across the Ritchie ramp to the barks of the company’s renowned blazer-donning ringmeisters. “The Timed Auction piece is not live-called,” says Blake, “but is still sold unreserved and it is still on the site so attendees can inspect and test it.”

Strength in a down market

In 2009, Ritchie Bros. Auctioneers held strong at about $3.5 billion in transactions, despite a down equipment market. The company’s bottom line was up about 8 percent. What that says to Blake is that, “ultimately, people will always flow to the most efficient channel to get them what they need.”

And just how big is Ritchie Bros.? This one single company, peddling used iron, alone moves $3.5 billion among the $100 billion in transactions globally in construction, mining, material handling, transportation and agricultural equipment. That $100 billion represents all equipment, new and otherwise, moved by manufacturers and dealers throughout the world. And, to think, the auction house is traditionally considered the strange, weak little nephew to the dealership!

“A lot of the larger contractors I’ve known over the years really viewed the auction channel as sort of a last resort for dispersal,” says IronPlanet’s Hendrix. “They’d park their retired stuff out on a busy road somewhere. They’d clean it up, park it out there, and would try to retail it themselves locally and regionally. They would allow their equipment superintendent to manage that thing … and that guy would have to deal with the tire-kickers and all the headaches involved with that.

“You’ve got retail pricing, you’ve got wholesale pricing, and then there’s something in the middle. What they’re trying to do is get up from wholesale pricing – or what they consider to be auction pricing – and get closer to the retail numbers. They hope that they can do it, or they think that they can do it, by remarketing the piece themselves,” explains Hendrix. “And I can tell you that some of them have more success than others, because they’ve got a reputation in the industry for maintaining those machines throughout their life cycle and they produce a product that, when it comes out and is retired, it is better than average.

“There are some of those guys who still kind of look at the auction business as a last resort. It’s for the stuff that they can’t move themselves.”

But, as Top Bid’s Wiggins and Darnell point out, if you need a certain piece of equipment, and you need it now, there’s no better place to find it than at auction. Recently, Wiggins watched in awe at a J.M. Wood Auction Company event in Alabama, where top-notch, late-model, county-owned dump trucks were put up for bids. One buyer, with immediate clean-up work to do in Haiti, walked away with 26 of the year-old, tri-axle Mack Granite dump trucks, which would normally go for about $95,000 each. “Now, because of the need and the availability of those trucks,” says Wiggins, “they went for a brand new truck’s price: $126,000.” Certainly, the seller there is a winner, as is the auction company, but so too is the buyer, says Darnell. “First of all, he knew those trucks were there. He knew that if he paid enough, he could get them and then get out of there with them.”

That, in late 2008, a group collectively long considered the best in equipment marketing, Caterpillar dealers, would themselves launch Cat Auction Services speaks volumes as to where the auction business now ranks. Cat Auction Services conducts live on-site unreserved auctions, complemented by Internet bidding at www.catauctions.com, for equipment of various makes and types.

Old school or new technology, the game’s the same.

“Anytime you have buyers competing for something,” says IronPlanet’s Hendrix, “your potential for a better realized price is always higher.” v

Missouri Department of Transportation formula creates competition and saves money, too.

By Daniel Brown, Contributing Editor

This definitely keeps people on their toes,” says John Donahue, P.E., construction and materials liaison engineer with the Missouri DOT. “We are getting more bidders per job, it stimulates more competition, and it has saved the state millions of dollars.

He’s talking about alternate bidding, which pits two or more equivalent designs against one another in a competitive environment. In Missouri, MoDOT designs equivalent new pavements in concrete and asphalt – both for 45-year design lives – and takes bids on both for the same project. The low bidder gets the work, whether it’s asphalt or concrete.

Missouri has awarded more than $2 billion in construction using alternate bidding and leads the nation in the practice. Other states, including Louisiana and Ohio, also use alternate bidding, but not to the extent that Missouri has.

MoDOT figures that an asphalt pavement will need milling and filling of the driving lanes at year 20, and another mill-and-fill across driving lanes and shoulders at year 33. For concrete, MoDOT assumes a major rehabilitation at age 25. That means replacing 1.5 percent of the panels and diamond grinding the entire surface.

For comparison purposes, the state adds a life cycle cost adjustment (LCCA) factor to the asphalt bid. The adjustment factor is calculated by taking the present value of asphalt’s two mill-and-fill jobs and subtracting the cost of the concrete repairs. That number, the LCCA, represents the future cost of the repairs as discounted to the present using the current discount rate of the federal Office of Management and Budget. And the future cost of the repairs is estimated using current unit prices for asphalt, cement and aggregates.

If the asphalt construction bid plus the LCCA is the low bid, then asphalt gets the job. But if the asphalt bid plus the LCCA exceeds the low concrete bid, then concrete gets the job. That has happened only four times over more than 160 projects in six years, Donahue says.

“We did a couple of projects where we had a 5-inch unbonded concrete overlay bid against a 5.75-inch asphalt overlay. In one case it went to concrete and another time it went to asphalt.”

— John Donahue, P.E., construction and materials liaison engineer, Missouri DOT.

Input from both industries

MoDOT’s decision to use alternate bidding came from meetings with pavement team members. The team consisted of MoDOT personnel, representatives of both the concrete and asphalt industries, and personnel from the Federal Highway Administration.

“We were looking for a common platform, rather than having two separate design programs that handled asphalt and concrete, and then trying to determine if they were equitable,” says Donahue. MoDOT settled on using AASHTO’s Mechanistic-Empirical Pavement Design Guide (ME-PDG). It uses the same traffic and environmental data for both asphalt and concrete pavements.

The decision to use the ME-PDG went hand-in-hand with MoDOT’s move to alternate bidding. Regarding the ME-PDG, “There was obviously a lot of discussion about what stress thresholds would be acceptable levels for designing in both asphalt and concrete,” Donahue recalls.

Eventually MoDOT decided to consider just two distresses for asphalt and two distresses for concrete. For asphalt, the two were rutting in the HMA layers and fatigue cracking. On the concrete side, MoDOT would look at faulting and fatigue cracking – the percentage of slabs cracked.

“What is nice about the ME-PDG is the fact that you input the same traffic data and environmental data, and you really have three main working components of the ME-PDG,” Donahue says. “You have the traffic data analysis and the integrated climatic model which simulates what’s happening to the pavement profile over the design life.

“The third component of the ME-PDG is the mechanistic analysis. For asphalt, the inputs are the mix components, the volumetrics, the binder grades and so forth. For concrete, the inputs are factors such as cement content, strength of the concrete, dowel bars and the like. Then the ME-PDG uses modeling software and transfer functions to predict levels of distresses in the designed pavement.

“For asphalt, we want to make sure that the level of rutting or cracking does not exceed a certain level over the design life,” says Donahue. “And for concrete, we want to make sure that faulting and cracking don’t exceed a certain level at a certain time.”

Alternate bidding for rehabilitations

For major rehab jobs, MoDOT uses fixed designs. Pavements get either an 8-inch unbonded concrete overlay or a 12-inch asphalt overlay on rubblized concrete. Those two designs are bid as alternates. “If we actually designed each of those we could possibly increase or decrease the thickness a little bit, depending on what traffic or the environment presents. But we don’t do that,” says Donahue.

“Part of the reason is, we have kind of a tenuous balance with each industry when comparing those designs,” he says. “So we didn’t want to tinker with the rehab side too much.” Those thicknesses were derived using the 1993 AASHTO

Design Guide combined with best practices data from other states.

MoDOT has also done some alternate bidding by proposing only asphalt overlays on asphalt or composite pavements. If the state wants to effectively do a 3.75-inch overlay on such a pavement, that would normally consist of two layers of asphalt: a 2-inch binder course and a 1.75-inch wearing surface.

There are three fairly equivalent ways to do that. You can require a leveling course, then place the two lifts of asphalt. “Or, we may allow them to mill off 2 inches and place 2 inches back, followed by the 1.75-inch wearing course,” says Donahue. “The third possibility would be to do hot in-place recycling the surface and then place a 1.75-inch overlay on that. So there you have three different scenarios that may play to the strength of one contractor or another. From our point of view, we’re getting 3.75 inches of new, or new-quality material.

“We also have done some conventional asphalt versus concrete bidding with thinner overlays,” says Donahue. “We did a couple of projects where we had a 5-inch unbonded concrete overlay bid against a 5.75-inch asphalt overlay. In one case it went to concrete and another time it went to asphalt. The way it pans out depends heavily on the volatility of asphalt prices at the time.”

For projects of less than 14,000 square yards of discontinuous paving, or less than 7,500 continuous square yards, MoDOT does not apply the life cycle cost adjustment factor. “If it’s less than that we’ll just call it optional bidding and not apply the adjustment factor,” says Donahue. “The contractor just picks one material or the other.”

Missouri estimates that an asphalt pavement will need a mill-and-fill rehab in year 20.

MoDOT has three different base designs that affect the overall thickness of the pavement structure. One is an 18-inch shot rock base, with fragments up to 12 inches in length. The material must be approved by a state geologist. Usually that material is available on a job site that includes unclassified excavation, especially in the southern half of the state. On top of the shot rock, MoDOT specifies a cap stone, or finer crushed aggregate, to give the paver a flat platform.

Another base is a 4-inch crushed stone base, usually used in the northern half of the state, which generally has no rock available on site. The third base, for interstates or high-volume freeways, consists of two layers. The top is a 4-inch open-graded permeable treated base. It’s stabilized with asphalt or cement. Under that is a 4-inch crushed stone base that serves as a filter layer.

For concrete pavements, Missouri figures on a major rehabilitation at age 25.

If the situation calls for the 18-inch rock base and the grading contract is separate from the paving contract, then the grading contractor places the rock, but not the cap stone, which is done in the paving contract.

“In those cases the designer will set the profile for the thicker pavement, because you can’t shape rock base,” says Donahue. “You can’t blade that off.” So if an asphalt contractor gets the project and his design is thicker, at 10 inches, he simply places the cap material and paves with asphalt.

But if a concrete contractor gets the job, he has to place the cap material plus 2 inches of stone and then pave the 8 inches of concrete. By doing that, either profile reaches the same elevation. “If the award goes to concrete, it’s up to the concrete contractor to add the 2 inches of crushed stone,” says Donahue. “It’s on them.”

Concrete pavements have succeeded well under bidding in Missouri.

For the other two bases – the permeable treated base on the crushed stone, or the 4 inches of crushed stone – the material must be imported. So that material is included in the paving contract.

“So because the paving contractor is placing the base and the pavement, we set the subgrade elevation for the thinner pavement,” says Donahue. “If it goes concrete, then that contractor just places the base on the finished subgrade, then paves it. But if an asphalt contractor gets the project, he has to blade off the subgrade, which is doable, because it’s a fine-graded material. Then the asphalt contractor cuts the subgrade down by whatever the difference in the pavement thicknesses is and places his base on top of that.”

Naturally, if grading and paving are both included in one contract, the winning contractor will control the subgrade elevation because he is committed to one pavement type or the other. v

How They Do It In LA

For several years now, Louisiana has done an alternate design-alternate bid (ADAB) process on projects where the difference in life-cycle costs between concrete and asphalt is less than 25 percent. “If the difference is greater than 25 percent, then we only bid it in the less-expensive material,” says Jeff Lambert, pavement design engineer with the Louisiana Department of Transportation and Development.

The state’s ADAB model adds a factor “C” that represents costs for future rehabilitations and user delays associated with a contractor’s base bid, called “A”. The “B” component is time-based bidding that may also include an incentive for early completion. The state transportation department calculates the “C” component and awards the contract to the company with the low sum of A + B + C.

For asphalt, the “C” component includes two mill-and-fill rehabs over 40 years. Similarly for concrete, two rehabs are calculated into the life cycle cost over 40 years. At 20 years, joints are cleaned and resealed, and some patching and shot blasting is included. Additional patching and surface retexturing is figured in at year 30, says Lambert.

“We’re sure that both industries accept the fundamental principles of it,” says Lambert. “They appear to be happy with it; they’re still bidding on our projects. It has increased the number of bidders.” He says Louisiana uses the ADAB model on most larger new construction and reconstruction projects.

Time is money whether it’s finishing a job or figuring out job costs in between. You can’t wait for your accounting system anymore.

By Daniel Brown, Contributing Editor

Suppose you bid a large excavation job to use an excavator and trucks to produce 300 cubic yards per hour. Say on a Tuesday you work 10 hours , produce 3,000 cubic yards, and production is on target. But is the job in over budget?

(Above) Cost control is especially important at a project such as this bridge approach in Pittsburgh, being built by Trumbull Corp.

How do you make sure you know if you’re over budget? How do you know what’s wrong?

Waiting for your accounting system — which might provide feedback in a week or two — just won’t cut it.

Modern software can make the difference. Here are just a few examples of just how it can work with your numbers.

“Costs are only gathered in your accounting system once a week, and by the time you got that report and looked at it, you might have forgotten what you were doing that day,” says Bill Woodford, chief estimator for Trumbull Corp., a large Pittsburgh-based contractor. “You might find that although you’re making production, you’ve got too many people on the crew, or you’re using a different spread of equipment than what the estimators originally figured.”

To control daily costs for labor and equipment, Trumbull uses Heavy Job software from HCSS. Each day, a foreman enters labor and equipment costs into a computer. “Then we know what our costs are and we can compare them against our budget,” Woodford says.

At Trumbull, Heavy Job software integrates with Profitool, which is accounting software. Profitool is used to track costs for subcontractors and materials and summarize all costs on a monthly basis. Heavy Job is used to track labor and equipment on a daily basis.

“We and most contractors separate them that way because labor and equipment is a very constant ongoing and changing cost, whereas most contractors have a pretty good handle on what their subcontractor and material costs are,” Woodford says.

Seamless exporting for labor, equipment costs

At W.W. Clyde & Co, a large contractor from Springville, Utah, project teams also use Heavy Job, but they integrate it with Viewpoint Construction Software for accounting purposes. Project personnel enter labor and equipment costs daily. “Job personnel have the ability to track costs daily within Heavy Job, but we also export that information each week to Viewpoint,” says Scott Okelberry, a vice president at Clyde.

“We could export it more often, but we choose to do it weekly because the jobs have their daily information in Heavy Job at their fingertips,” Okelberry says. “So to put it daily into Viewpoint doesn’t make that much sense for us.”

For estimating, W.W. Clyde uses Heavy Bid, which is a companion piece of software to Heavy Job. “Our estimates roll from Heavy Bid to Heavy Job and Viewpoint — two places,” he says. “The seamless export to accounting is very important. A lot of programs can export data that can be manipulated, but it’s not very easy to do. Heavy Job is very user-friendly and it’s pretty simple to make the transition between Heavy Job and Viewpoint.

He says Heavy Job allows a contractor to do “what if” scenarios on daily costs. Suppose a pipe-laying crew is not meeting budget. They decide they need another excavator, so they plug another crew scenario into Heavy Job. They could get maybe 25 percent more production for 15 percent higher costs, Okelberry says. Heavy Job will tell the project manager what the projected unit cost would be. “They would try it out the next day, or the next week, and see what difference the added excavator makes,” Okelberry says.

Does Heavy Job help Clyde make more money?

“We try to give projects the information they need every day about whether they’re meeting budget or not,” Okelberry says. “And we expect them to use that information to make decisions to improve.

W.W. Clyde is building this bridge as part of the Pioneer Crossing project at the Jordan River near American Fork and Lehi, Utah.

“So I would say it helps us to either make more money than we might have, or to lose less,” he says. “If you can figure it out early then you can turn it around early. It may mean that you’re losing less money, but it’s a change for the better overall.”

He says Clyde uses a junior office/field engineer to make sure that the data entered into Heavy Job is accurate and put into the right cost codes. “We get a more accurate daily cost with fewer mistakes by having an engineer do that — a graduate engineer who’s been out of school, say, less than five years,” Okelberry says. “He or she is learning the job, learning project cost accounting; it’s a training ground.”

When that field engineer has made the comparison of costs to the budget, he gives that information to the foreman, the superintendent, and the project manager. “At every daily foremen’s meeting, where all the superintendents and foremen come together, that field engineer can hand them a report that says, ‘Here’s what your operations cost yesterday,’” Okelberry says.

Woodford says Trumbull’s job personnel report labor and equipment costs using laptops, desktop computers in the field office, or even from home computers. Any Internet connection will work, and the software is not Web-based. Instead, Trumbull people tie into a remote connectivity program called Citrix, and use it to gain access to the company’s servers.

“It can be a very poor Internet connection, but the guys can still connect from wherever because the processing isn’t happening back and forth across the Internet connection,” Woodford says. “It’s happening here in our office.”

He likes the uniformity of the Heavy Job reporting process. All jobs report costs the same way; before, they used spreadsheets that were different for every manager. And sometimes they were not properly set up.

W.W. Clyde also uses weekly job status reports to compare actual total costs to the budget. Those reports come from Viewpoint. They incorporate costs for materials, subcontractors, and other costs that are not counted daily. Plus, every month W.W. Clyde does a job cost projection that presents a detailed look at what the firm expects costs to be for the entire project. “If it’s projected to be over budget or under budget, then we claim profitability based on those projections,” Okelberry says.

As part of the Legacy Parkway project, W.W. Clyde crews often worked within two feet of live traffic to raise the structures needed for the new parkway.

Gorman Brothers Inc., a paving contractor based in Albany, N.Y., does business a little differently. Gorman performs approximately 600 projects per year and many of them last only a few days.

Using laptop computers and USB broadband cards to access the Internet, each of more than 20 field personnel on a daily basis enters labor hours, equipment hours, materials used and production achieved. To do that, the company employs a program called hh2 Web Services (Remote Payroll and Field Reports) by Digital Business Integration. Job cost information is keyed into a computer just once, by the foremen, says Barbara Morse, Gorman’s IT Director. Labor and equipment hours are imported to a database, then into Sage’s Timberline Office program. The hh2 program integrates seamlessly with Sage Timberline Office. An administrative person reviews each day’s job costs and makes sure that the foremen fill out their reports properly.

Prior to using hh2, Gorman used paper forms. Foremen had to find a fax machine or visit the home office. Handwriting was hard to read. The paper had to be reviewed, approved, and compiled. Then it had to be keyed into another database and analyzed by that database before being imported into Timberline for accounting purposes.

The payroll process now goes much faster. Long-time field foremen, not used to computers, like the hh2 system. “They said, ‘Oh, this is a lot faster than paper,’” Morse says.

Gorman Brothers offers a number of specialized paving processes such as this microsurfacing process, a resurfacing treatment for asphalt pavements.

Now, instead of working feverishly on Thursdays to meet a direct deposit deadline, Gorman is processing payroll on Wednesdays. Friday is payday for the previous week. “The savings there was substantial,” Morse says. “Now we have more information sooner, which is also good for the sales people who are estimating and managing jobs. The payback has been well worth the cost. The seamless integration with hh2 and Sage’s Timberline Office has made those systems much more efficient.”

Gorman’s sales people use Timberline software to estimate projects. “That works well for us,” Morse says. “We put that in several years ago and it was an awakening for the sales people because when they did their estimates manually they often didn’t consider overhead costs like the time to transport equipment from job to job.”

Gorman accounted for those costs through job cost accounting, but they really weren’t included at the beginning of a project. Now all costs are included and the sales people have a more accurate price per unit of pavement to start projects.

Morse says Gorman built the estimating database by individual paving processes. Timberline calls each paving process an assembly, or it could be called a model. There’s a model for a certain chip seal process, another one for the NovaChip process, another one for FiberMat, and so forth.

“If the sales person has a customer who is just interested in FiberMat process, they’ll just pick that model, and the software asks them certain questions,” says Morse. Many of the questions are take-offs from the project design: length, width, square yards, hours per day worked, estimated production per day, and so forth. Using those numbers, the software produces a unit cost, say per square yard, for that pavement process.

Barbara Morse, IT director at Gorman Brothers, and foreman Don Price reporting payroll by laptop computer.

In turn, Gorman exports those estimates out of the estimating software and imports them into a database that’s in Microsoft Access. “We compare those estimates to actual costs that happen in Timberline,” Morse says. “So in Timberline you get costs from payroll, costs from accounts payable, costs from equipment, and so on. We compare all those costs with what the sales person estimated the project to be.

“We’re starting this new commitment process,” Morse says. “If I’m a salesperson and I’ve got a customer who is 95 percent sure he’s going through with a project, I will enter the estimate, called a projection, which will get imported into our job cost database.

“From there, now every week, sales people are going to get reports where they can compare their estimates against budget,” Morse continues. “So variances from budget will be reviewed on a weekly basis rather than monthly, as we did before.” v

by Daniel Brown, Contributing Editor

With workability, environmental benefits and solid performance reports,Reclaimed Asphalt Pavement — RAP — is becoming a bigger part of the mix.

It’s a trend that’s sweeping the nation: using more reclaimed asphalt pavement (RAP) in hot-mix asphalt. RAP is also making inroads into warm-mix asphalt.

Astec’s foamed asphalt attachment makes warm mix, which will enhance the workability of high RAP mixes.

Since 2007, about half the states, 24 to be exact,* have increased the allowable percentages of RAP in their asphalt pavements. And using RAP can save states a lot of money.

To mill, haul and process RAP costs only a fraction of the cost of virgin mixtures. So RAP allows contractors to produce a lower cost hot mix and pass along savings to owner agencies.

“States are allowing more RAP to guard against future high fluctuations in the price of asphalt binder,” says David Newcomb, vice president of research and technology for the National Asphalt Pavement Association (NAPA). “Plus, RAP is more environmentally friendly. And states have looked at the performance of mixes with higher RAP contents and concluded that RAP doesn’t detract from the quality of the asphalt.”

RAP primarily comes from rehabilitation of existing roadways or parking lots. Typically it is trucked from a milling machine to a stockpile at an asphalt plant. RAP helps reduce the cost of hot mix because the aggregates in the recycled material have already been coated with asphalt.

RAP can be added directly to hot-mix asphalt at the mixing plant in amounts ranging from 10 percent to 50 percent or more by weight of the mix. Properly designed and constructed, pavements with RAP will last as long or longer than roadways built with virgin materials, says Kent Hansen, director of engineering for NAPA

More RAP = lower bid prices

Contractors using more RAP can cut their bid prices for hot-mix asphalt.

The total cost of milling RAP from a project, hauling it to an asphalt plant, and crushing and screening is typically between $6 and $10 per ton, says Randy West, director of the National Center for Asphalt Technology (NCAT) at Auburn University in Alabama. Virgin aggregate costs range from $10 to $25 per ton, depending on the region of the country. In 2008, virgin asphalt prices in 2008 jumped from about $350 to $800 per ton. In 2009, liquid binder stabilized at around $410 per ton.

For example, a virgin mix (5-percent binder but no RAP) with $15-per-ton aggregate and $410-per-ton asphalt binder costs about $34.75 per ton for hot mix materials. (The materials cost is 0.95 x $15 + 0.05 x $410 = $34.75)

By contrast, with a mixture of 5 percent asphalt binder and 20 percent RAP that costs $8 per ton to process, the materials for the RAP mix cost about $29 per ton — more than a 16-percent savings over the $34.75-per-ton virgin mixture. As RAP content and virgin binder costs increase, so do the savings.

So when liquid binder prices spiked in 2008, West says the industry recognized that the best way to keep hot mix asphalt costs in check was to increase RAP contents. The other big motivation for higher RAP contents has been the sustainability movement. Recycling more today means using less of the earth’s non-renewable natural resources.

High RAP contents

Although many agencies were restrictive on RAP usage in the past, particularly for surface layers, there is a growing trend to allow higher RAP contents. The national average RAP content for surface mixtures is about 15 percent, and it’s about 20 percent for base and intermediate courses, says West. When asphalt recycling began in the late 1970s, RAP contents of more than 50 percent were used on some projects.

Florida provides a good example of increasing RAP usage. When binder prices jumped in 2008, Florida boosted the percentage of RAP allowed in surface courses to 15 percent, up from zero, says Jim Musselman, a Florida state bituminous materials engineer.

In the next year, the state raised the percentage again, to 20 percent.

But the increase came with qualifications. Florida has a problem with local aggregates that polish on the surface and don’t provide good friction characteristics. So when the state raised the RAP percentages allowed in surface courses, it also required the virgin aggregates to consist of 60 percent granite. The granite is imported from Georgia or from Nova Scotia.

“We use a very large volume of RAP in Florida,” Musselman says. “Historically, it’s accepted practice in every layer except surface courses. We took a big step up to allow it in surface courses. Our average RAP use today is 23 percent.”

A few pavement failures with high RAP contents decades ago likely caused some agencies to take a very cautious stance on RAP usage. “Failures typically are not well investigated or documented and so we often don’t learn the real causes,” West says. “Some agencies want more performance data on higher-RAP mixes; others want to wait on more guidance on how to select the right grade of virgin binder.”

Today’s RAP technology is more advanced than when the failures occurred. “A couple of new technologies are coming into practice to make these higher percentages of RAP more successful,” West says. One is the fractionation of RAP, which separates the material into two or more stockpiles based on the size of the RAP particles. It’s becoming more common to separate RAP into a coarse pile, with particles of more than 1/2-inch or 3/8-inch in size, and a fine pile with particles of less than one-half of an inch. That lets contractors use fine RAP in finer asphalt mixtures and coarse RAP in coarse mixtures.

Mixing RAP and WMA for compactability

“Second is the combination of warm-mix asphalt technologies with high RAP contents,” West says. Warm-mix asphalt technology does not necessarily allow one to use higher percentages of RAP. However, mixes with high RAP contents can be difficult to place and compact – but a WMA technology can help with compactability.

“The advantages of the RAP and WMA combination include enhanced workability of high RAP mixes, big economic savings, plus the triple environmental benefits of reduced (plant) emissions,, reduced energy demand, and conservation of natural resources,” says West. (Warm mix asphalt results in a mixture that is about 240 to 270 degrees Fahrenheit, not the 300 degrees Fahrenheit used for conventional hot-mix asphalt.)

When a conventional hot mix plant runs RAP, you have to push up the virgin aggregate temperature to 500 or 600 degrees Fahrenheit to heat the RAP that is being added. But with WMA technology, you don’t heat the mixture as hot. That means you don’t drive off the light oils from the virgin binder or the RAP. Using warm mix technologies provides a better film thickness of binder on the aggregate, and the RAP is not scorched in the process.

Test track results

On the NCAT Test Track in Alabama, where accelerated loading tests are run on various asphalt mixtures, high RAP pavements have turned in some excellent rutting results. Basically the results show that the more RAP a mixture contains, the less rutting you’ll get. For example, less than 9 million equivalent single axle loadings (ESALs) a 20-percent-RAP mixture using a PG 67-22 binder showed a rut depth of 8.6 millimeters. By contrast, a 45-percent-RAP mixture with PG 76-22 binder showed only 0.5 mm of rut depth after 9 million ESALs.

LoJac Enterprises Inc., of Tennessee, ran 50 percent RAP in 9,000 tons of a binder course and 30 percent RAP in 6,000 tons of surface course mixture for a demonstration project.

NCAT’s West explains that as RAP percentages increase, the binder stiffness also increases. And stiffer binders are more resistant to rutting. West does, however, express some concern with cracking of high-RAP mixtures.

Field performance results on cracking tend to vary, he says. In some cases the virgin mixes have performed better than RAP mixes and in others, the mixes with RAP have performed better than virgin mixes in terms of cracking. “A properly selected virgin binder can mitigate issues with cracking,” West says.

Fractionating RAP helps a producer to better control the sizes of the material.

NAPA’s Newcomb says several factors will contribute to success with increased percentages of RAP. “Today we have better controls and management of RAP stockpiles and hot mix plants in general,” says Newcomb. “We have better plant emissions controls, better heat distribution in the mixing drums, and better ways to size the RAP and feed it into the drums.” v

Cold RAP Makes Green Pavement

The first portable cold mix plant in North America permits Albuquerque Asphalt Inc., of Albuquerque, N.M., to build a strong road base material using cold reclaimed asphalt pavement (RAP) and a combination of binder materials.

Albuquerque Asphalt recently gained approval by the city of its name to use the material, called Q Base, in street base construction, says Robert Wood, president of the company. Q Base is aimed to dovetail with the city’s Albuquerque Green Q initiative. Q stands for quality, and also is a play on the letter Q appearing twice in the city’s name.

To make the material, Albuquerque Asphalt bought a Wirtgen KMA 220 portable cold mix plant. The plant uses a pugmill to incorporate 1.5 percent hot performance grade asphalt binder, which is foamed into crushed RAP along with a small amount of water and 1.0 percent Portland Cement. Wirtgen calls the material Green Mix, because the aggregate is made of 100 percent recycled materials. The RAP is crushed to ¾-inch (0.75) minus size.

The Wirtgen KMA 220 portable cold mix plant can produce 220 tons per hour of asphalt base material using virgin and/or reclaimed materials including excavated road base, RAP, or crushed recycled concrete.

“With that mix design we achieve a structural coefficient of 0.3 per inch of thickness,” says Wood. He says his specification calls for attaining 1,625 pounds of Marshall stability – and the lowest actual test number for the material is 1,800 pounds. “And we’ve achieved some tests of well over 2,000 pounds,” Wood says.

Albuquerque Asphalt has gained preliminary approval from the New Mexico DOT to use Q Base as an accepted road base material. “And we’ve put down 10,000 tons for Bernalillo County, where Albuquerque is located,” Wood says.

On a recent county project called La Vega Street, the design called for 3 inches of conventional hot mix asphalt (HMA) to be placed over 6 inches of untreated gravel base. “We ran an equivalent structural number with Q Base, and came up with 1.5 inches of HMA over 4 inches of Q Base,” Wood says. “But we actually placed 2 inches of HMA over 4 inches of Q Base.

“We’re very excited about Q Base,” Wood continues. “And once these government engineers see this material, they’re excited about it. It’s a wonderful material with an exciting future.”

Oldcastle Materials Inc. considers rebuilding larger wheel loaders when they reach the end of their first life.

Extreme maintenance practices can help you extend equipment life spans — but be aware you are managing risk.

In today’s economy, we’re all trying to stretch things as far possible. Whether it’s stretching time between oil changes in your car or holding off on buying that new pair of work boots you know you need, we’re pushing the limits.

The construction industry is no exception. Its economic downturn has prompted many contractors to run equipment for more hours than normal. Capital for new machines is scarce so equipment is being kept longer and worked harder. Knowing that the equipment has to last, managers carefully watch oil samples for wear particle signals that mean component failure is approaching. And some equipment managers are even replacing small components, such as water pumps and alternators, before they fail.

“We’re probably adding 20 percent more to the life of our equipment than we would in normal economic times,” says Rex Davis, a vice president at RMCI Inc., Albuquerque, N.M. “Sooner or later we have to make some decisions (about trading in equipment). It doesn’t do any good to have new equipment if you don’t have work for it. Hopefully the economic tide will turn soon.”

Davis replaces small components such as turbochargers and water pumps before failure. “A turbocharger normally runs 5,000 to 7,000 hours, and once you get past that you start looking at it,” Davis says. “We do go by historical failure records on small components. A contractor’s history is a better representation of what the equipment will do than someone else’s suggested failure times.”

Equipment managers need to make a plan for running equipment longer than usual. You watch wear indicators such as oil sample analysis. Outside companies will do vibration analyses that can pinpoint problems or incipient failures. “The plan will call for additional observations of known maintenance items — and some tests for wear indicators you normally would not suspect,” Davis says.

Finding the ‘sweet spot’

Dan Connelly, vice president of equipment services for Oldcastle Materials Inc. in Atlanta, notes that demand for his company’s construction services is down, so equipment is being kept longer. However, he points out, the equipment is not working its usual number of hours. “Operating hours, not calendar days, is the important factor in determining our replacement cycles,” Connelly says. With about 40,000 pieces of rolling stock and eight divisions, Oldcastle is one of the nation’s largest construction contractors.

Connelly says Oldcastle strives to replace most equipment at the “sweet spot” — the optimum point in a machine’s financial life just before its repair costs balloon and major components need replacements. Oldcastle determines its own sweet spot for each category of equipment, based upon historical records and analysis of owning and operating costs.

However, in some categories of equipment, such as 7-cubic-yard wheel loaders, Oldcastle considers going for a second life by replacing major components. Forty-ton and larger rigid-frame haul trucks would also be considered for major component replacements. The company owns about 500 dozers and 800 excavators, but “typically we don’t rebuild them,” Connelly says.

How about replacing small components before failure? Yes, says Connelly. “We certainly attempt to replace components such as starters, alternators, and water pumps before failure,” he says. “We advocate condition-based maintenance.”

The level of service that Oldcastle procures from equipment dealers depends on the relationship of each division with its local equipment dealers, Connelly says. Each division has multiple shops that do preventive maintenance and some repairs.

Oldcastle uses Viewpoint management software, which has an equipment module. That module identifies each piece of equipment by a unique number. Revenues, as well as operating hours and all costs, including oil changes, parts and repairs, are tracked for each piece of equipment. “We take data that is housed in Viewpoint to determine the optimum equipment life cycles,” Connelly says. “We look at each piece of equipment multiple times each year.”

With 40,000 plus pieces of equipment, Oldcastle Materials is one of the nation’s largest contractors. But it, too, is keeping equipment longer than usual.

The Washington Division of URS Corp. keeps equipment based on site-specific applications, says Bob Merritt, director of maintenance at the Boise, Idaho-based firm. The Washington Division owns 2,000 plus pieces of equipment that work at construction sites, quarries and mines around the world.

“We keep equipment on long-term projects based on application and production,” Merritt says. “Whereas most contractors try to get rid of machines before the first major rebuild, we may hold it longer and go through one or two rebuilds on many pieces. The number of hours is driven by the class of equipment.”

Take 50- to 70-ton excavators, for example. Washington has some that range from 14,000 hours up to around 25,000 hours on longer-term projects. Front shovels and mining excavators run longer — up to 60,000 hours.

How about dozers? “Typically we try to get rid of the less-than-300 horsepower class at about 10,000 to 12,000 hours; the 300- to 500-hp class in 20,000 hours and the above-500-hp class in 50,000 hours,” Merritt says. “Even at those hours, that’s longer than most people run them.”

Washington Division will do a major rebuild at 12,000 to 14,000 hours on a construction dozer. That means the complete power train gets rebuilt components — engine, transmission, torque converter and final drives.

Why keep equipment longer? “If it adds value we do it,” Merritt says. “In the last few years, until the downturn, it’s been difficult to get the equipment we needed. The low availability of new and used equipment made the price go up. Now with the change of the economy, lots of equipment in the smaller to medium-sized classes is currently available.”

Scarce capital

Capital for new equipment is very limited and profit margins are tighter than ever at American Infrastructure, says Mike Monnot, vice president of equipment for the Worcester, Pa.,-based construction company. The firm owns about 700 pieces of rolling stock and 350 on-road trucks. “So unfortunately, yes, we’re keeping equipment longer than we would like to,” Monnot says.

To run typical construction equipment beyond 10,000 hours is to gamble that you won’t have a catastrophic component failure, Monnot says. If you do get the major component failure, you have to repair it, because you can’t sell it in a failed condition. Then the other components still have the potential for failure. And the equipment’s technology becomes obsolete.

“So if a company makes a decision to keep the equipment longer, the only option that you really have is to do planned, predictive maintenance and schedule components to be changed out at intervals,” Monnot says.

“Through scheduled maintenance we’ve gotten as many as four life cycles, or 24,000-plus hours, out of large wheel loaders,” Monnot says. The wheel loaders work for a subsidiary called Independent Construction Materials, which runs asphalt plants. Monnot recommends getting expected component lives from the manufacturers, then watching all indicators of wear — oil samples, vibration analysis, wear measurements and the like. “You come as close to that end of life as you can,” he says.

In better economic times, Monnot likes to keep a newer fleet. “Typically I prefer to cycle equipment out at the end of its first life in construction, and in mining, maybe the second life,” Monnot says. “Beyond that, I would rotate it out and exchange it for new machines.”

Oldcastle Materials uses the equipment module in Viewpoint software to help manage the maintenance schedules on its equipment.

K-Five Construction Corp. is not keeping equipment any longer than usual because of the economic downturn, says Dave Gorski, shop administrator for the Lemont, Ill.-based paving contractor. He says last year wasn’t a bad year, but there doesn’t look to be much work for the current year.

“We have a 20 to 25-year replacement plan that calls for replacing everything sooner or later, and it’s tied to an annual capital budget,” Gorski says. “We own more than 600 pieces of on- and off-road equipment. Our replacement plan is done by years, so our replacements are pretty predictable and we aim to keep our capital spending on an even keel. But we do tweak the plan here and there based on factors like the volume of work we have or what the EPA is doing to us in terms of emission requirements.”

Fuel-based PM

Dale Warner, fleet director for Fort Myer Construction in Washington, D.C., has been using fuel-based preventive maintenance intervals since 1980. Recently hired at Fort Myer to reduce equipment owning and operating costs, Warner is implementing severity-based intervals — based on fuel usage — for the firm’s 600-plus machine fleet.

“Fuel use is the only way I know to judge the severity of an application, to tell how hard the machine is working,” Warner says. Previously, Warner used severity-based intervals at C.J. Miller LLC, a general contractor in Hampstead, Md., and at C.J. Langenfelder & Son Inc., formerly of Baltimore and now defunct.

At Fort Myer, Warner will start by changing engine oil at a fuel usage interval equal to 75 gallons times the number of quarts of oil in the crankcase. So if an engine holds 40 quarts of oil, multiply that by 75 and you get 3,000 gallons of fuel. When the engine has burned 3,000 gallons of fuel, it’s time to change oil.

“The hourly intervals will vary widely,” Warner says. “When I was at Miller, we averaged about 560 hours per oil change. Some we changed in 300 hours, some were 700 or higher. We did one at 800 hours.”

Oil analysis is a necessary part of extended oil change intervals, Warner says, warning that you have to watch wear metal particle counts versus their limits.

If you want to use fuel-based intervals, Warner recommends starting at 70 gallons times the quarts of crankcase oil. Watch the oil samples, then inch it up to 75 gallons, then 80 gallons, and 90 next. “A major manufacturer said 70, but I’ve been successful at using 90 gallons as the multiplier as new technology has developed,” he says.

Warner’s results are impressive. One year Miller did a total of 1,445 oil changes. The next year, by using fuel-based intervals, oil changes dropped by 40 percent. The savings in dollars: more than $400,000, figuring $760 per oil change. v

Author’s note: All of the equipment managers quoted in this story belong to the Association of Equipment Management Professionals. For more information about AEMP, go to www.aemp.org.

Measure, manage, monitor to maximize

Dale Warner plans to install a completely automated fuel reporting system at Fort Myer using a Fuelmaster reporting system at its pump island and its fuel trucks.

Both will have an electronic chip in the dispensing nozzle. When fueling takes place, the nozzle will receive equipment information — unit number, equipment hours and miles — through a transmitter in a ring installed at the fuel tank neck. When the fuel truck gets within 900 feet of a central data receiver, all fuel/equipment information will automatically transmit and upload into the contractor’s equipment management system.

With the help of on-board electronics, the Fuelmaster system will report time spent idling, miles, hours, fault codes, type of fuel used and time and date of fueling. Warner hopes to help reduce idling time dramatically. “If our fleet averages a half-hour of idle time for a year, that’s $300,000,” he says. “If we can cut that idle time to 15 minutes per day, that’s a savings of $150,000.

The system identifies who is idling, Warner points out, and the information is then given to senior management so appropriate action may be taken.

Super Smooooth Delivery

Placement of a 1/2-inch asphalt leveling course and careful screed control helped the contractor win a Quality in Construction Award from the National Asphalt Pavement Association (NAPA). Scotty’s Contracting & Stone, LLC, won the award for 6.2 miles of Interstate 65 in Barren and Hart Counties, Ky.

The use of a mobile mat referene on the Blaw-Knox paver helped to produce a smooth pavement on this section of Interstate 65 in Kentucky.

Scotty’s bid included money to pave the full 10-foot outside shoulder on the Interstate, but the state decided not to pave the entire area. By only paving 4 feet of the outside shoulder, Scotty’s realized some savings that were applied to paving the 1/2-inch leveling course. “We took that savings and put it toward the leveling course over the full 32-foot width of pavement, which is really what helped us obtain the ride we did,” says Jared Nix, quality control manager for Scotty’s Contracting.

The contractor paved the full 32 feet wide in two 16-foot pulls. Each of those pulls covered a 12-foot driving lane and 4 feet of shoulder. Scotty’s had used a Roadtec milling machine to remove 1.5 inches of asphalt, so after the leveling course, the Blaw-Knox paver put back 1.5 inches of hot-mix asphalt (HMA).

All the paving was done at night. The contractor could only close down to one lane between 6 p.m. and 6 a.m. “We paved during the day on the ramps,” said Nix.

Thanks to the use of a Roadtec Shuttle Buggy and a mobile mat reference on the paver, Scotty’s achieved exceptional rideability and earned an incentive for it. The mobile mat reference has a bridge that goes over the screed and runs a reference on the uncompacted mat just placed.

Quality from a high production operation

The use of a Roadtec Shuttle Buggy and a Topcon non-contact ski to control the paver helped Orlando Paving Co., Orlando, Fla., achieve award-winning smoothness on an asphalt mill-and-fill project in Florida. The project, on SR 528, won a 2009 Quality in Construction Award from the National Asphalt Pavement Association.

The project covered 66 lane miles and entailed milling up 3.5 inches of asphalt, then placing two structural lifts back – first a 2-inch lift, then a 1.5-inch lift. The contractor did not use the Shuttle Buggy for the two structural lifts, but did so for the 3/4-inch (0.75-inch) open-graded friction course on the surface.

“With the Shuttle Buggy you keep a constant movement, a steady pace and you virtually eliminate segregation,” says Paul Miller, construction manager for Orlando Paving. The results on the surface course were superb: a 4.17 ride number on a laser profiler, with 5.0 being the best possible score. “The paver moved along at about 30 to 35 feet per minute,” says Miller. “Anything faster would be moving too fast.

“We didn’t use the Shuttle Buggy for the structural courses due to availability of the machine,” Miller says.

The contractor produced and laid 160,000 tons of hot-mix asphalt in just 310 days. All paving was done at night on the heavily traveled roadway, which carried between 45,000 and 90,000 vehicles per day. The contractor worked the project between 8 p.m. and 6 a.m. on the mainline and 10 p.m. to 5 a.m. for the ramps.

Essentially, this only left six hours to pave because of the time required to mobilize and demobilize traffic control devices and to stripe the pavement at the end of the shift.

Even though it was a high-production operation, safety came first, Miller said. The project was completed, under heavy traffic, with no accidents involving the construction operations. “On a project like this one, we have a number of safety procedures to plan and set up, and we make sure that we have the discipline to follow them,” Miller points out. “We had safety meetings every night before work began and discussed in detail the objectives for success, and made sure that everybody knew the stopping and starting stations every night. At Orlando Paving, safety is our culture and we are dedicated to protecting our personnel as well as the traveling public. Working safely is a matter of good common sense, but you need to have the commitment to use all the right procedures and protocols.”

Three pavers are the charm

Operating three concrete pavers helped this contractor gain time and meet the schedule for a three-mile road construction project in St. Joseph, Mo. For Loch Sand and Construction Co., Maryville, Mo., the Route AC project on Riverside Road won a 2008 Silver Award in the State Roads category for Excellence in Concrete Pavement from the American Concrete Pavement Association.

Approximately half of the 3-mile section was four-lane divided highway with two driving lanes plus shoulders on each side. The remainder of the project was 56 feet wide including shoulders, said Rob Loch, treasurer and equipment manager for Loch Sand and Construction.

“We had a hard winter and we ran into subgrade issues, which put us behind schedule,” Loch says. “So we were looking for any way to pick up some time. Bringing in the three pavers helped expedite the paving work and complete the project in early November, before the season ended.”

Running the three pavers precluded the need to change widths on one concrete paver, which saved at least a week, Loch says. The contractor used one Gomaco 2800 working 20 feet wide, another Gomaco 2800 working 24 feet wide, and a Gomaco Commander III to slipform an 8-foot shoulder. The 20-foot-wide paver slipformed the variable median section in two passes. Meanwhile, the 24-foot paver slipped the divided highway section.

The project included some 33,000 square yards of 9-inch-thick doweled concrete pavement and 14,500 square yards of 6-inch-thick concrete shoulders. How was the smoothness? “We averaged 27.3 inches of deviation per mile from a zero blanking band,” Loch says. Anything less than 30 inches qualified for 100 percent pay.

The keys to smoothness were placement of a sound subgrade and base, an excellent track pad, a carefully set stringline and experienced paving crews, Loch says.

A wet and plastic subgrade proved to be one of the project’s major challenges. “We removed a pavement on the north end of the job, and placed shot rock to stabilize the area,” Loch says. “We also ran into springs of water, so we installed a system of French drains to carry away excess groundwater.”

The value of electronic grade controls

Using a Roadtec Shuttle Buggy and electronic grade controls proved the keys to exceptional smoothness on a mill-and-overlay project in Hinesville, Georgia. APAC-Southeast of Savannah, Ga., won a 2009 Quality in Construction Award from the National Asphalt Pavement Association for pavement construction on SR 119 and SR 196.

The Georgia DOT specifies that a milled asphalt surface meet a smoothness requirement of 1,325 millimeters/kilometer — and the finished pavement must meet a spec of 1,025 millimeters/kilometer. “So we used our electronic grade controls on the milling machines,” says Robert Royal, area manager for APAC-Southeast in Savannah.

The project was 4.734 miles long, and APAC used two milling machines — a Roadtec RX50 with a Topcon System 5 and a Wirtgen W2000 with a Moba electronic grade control system. Milling depth was 1.5 inches, and APAC replaced that with 1.5 inches of new hot-mix asphalt.

For the paving, APAC used a Roadtec SP100 Stealth paver equipped with a Topcon System 5 electronic grade control. “It’s a four-head sensor system with non-contact skis suspended from each side of the paver,” Royal says. The APAC paving crew improved the ride of the old pavement by 46 percent.

“Smoothness of milling is all about continuity and truck management,” Royal notes. “We operated the milling machines at a pretty slow travel speed, to permit more revolutions per minute of the cutter. Plus we wanted to flow the trucks smoothly to and from the mill’s conveyor belt. With paving, you want to minimize stops of the paver, and that’s what the Shuttle Buggy will do. By serving as a transfer vehicle, it helps maintain continuity of the entire paving operation.”

All milling and paving was done at night, under traffic. “We have a dedicated traffic control crew that pre-places our maintenance-of-traffic (MOT) devices,” Royal says. “They ride the lane closures and move the MOT devices as needed to make sure we follow the state specs. We ran between 18 and 22 trucks on mainline pulls.

The trucks hauled asphalt 36 miles from the plant in Savannah to the site in Hinesville, Royal says, and there was “excellent project management to coordinate between the roadway and the plant.”

James D. (Darrell) Cannon was the project manager; Joe Hires was the quality control manager. Jeff Andrews served as operations manager and Elmer Baggett, equipment manager, “was a tremendous help in making sure that all of the paving equipment and corresponding electronics were set up properly and in good working order,” Royal says.

Dust breaks the concrete-asphalt bond

Excellent smoothness results on a concrete overlay produced an award-winning project for Duit Construction Co., Edmond, Oklahoma. Duit won a 2008 Gold Award for Excellence in Concrete Pavement from the American

Concrete Pavement Association in the Overlays category.

On a 10-mile stretch of Interstate 35 near Stillwater, Okla., Duit averaged 1 inch per mile of deviation from a 0.20-inch blanking band. The specification called for a maximum of 6 inches per mile. The contractor earned 100 percent incentive payments for 3 inches of deviation or less per section of pavement.

The original pavement consisted of 10 inches of asphalt. A Duit subcontractor milled 4.5 to 5 inches of the asphalt, taking care to control the profile of the remaining asphalt. A properly graded asphalt base helped to achieve the concrete smoothness results. It required four passes to mill the 26-foot wide pavement.

Duit used two concrete pavers to place the 8.5-inch thick concrete overlay. The lead paver, a CMI-made SF 450, a four-track paver, worked 26 feet wide to spread the concrete, which trucks had placed on the asphalt. Mounted behind the lead paver was a dowel bar inserter, which placed dowels at 15-foot intervals. The second paver, a CMI-made SF 6004, performed the finish paving, said Gary Gaul, executive superintendent for Duit. (CMI has been incorporated into Terex Corp.)

It was an unbonded overlay. The dust from the milling operation served as a bond breaker between the asphalt and the concrete.