Managing cost effectively is not solely a matter of working with big-ticket items. For example, properly insulating pipes and covering stockpiles saves money, so does reducing time wasting and managing inventories without periods of having too much or too little. Check out the free National Asphalt Pavement Association (NAPA) publication, 101 Ideas to Reduce Costs and Enhance Profits at www.asphaltpavement.org.

Cost management is also hindered by other factors that are easy to overlook, such as congestion. It continues to be such a serious problem that contractors can expect to keep working during increasingly compact work windows, a cost-management problem that shows little sign of abating.

The increasing use of recycled materials in mixes, in terms of both tons used as well as percentages in a pavement, also offers potentially significant cost efficiencies whether it’s recycled concrete aggregate or used asphalt being re-used. Asphalt pavers, and agencies issuing specs, are finding ways to use more and more recycled material in mixes. Last fall’s repaving mix for Chicago’s Magnificent Mile included 45-percent binder replacement (courtesy of RAP and RAS) in an SMA mix. Chicago DOT says they saved 40 percent off the cost of an SMA that didn’t include recycling.

Building toll roads may become more commonplace where there’s a high traffic flow as states look to build projects that can draw in private money.

Anemic state budgets also inevitably mean an increase of lesser-used paved roads, especially in rural and semi-rural areas, being turned back to gravel roads. That process can be done in a number of ways, and contractors may find the ability to do the work increasingly valuable. It may even be a situation where the contractor can be proactive and propose such work.

Innovative Contracts

DOTS are increasingly looking at contracts that might not too long ago have been called “non-traditional,” such as design/build and design/build/finance. They are also showing a willingness (as budgets stay tight but the public stays hungry for new and better roads) to discuss innovative ideas from contractors that can see new ways to bid jobs.

For example, some DOTs appear more than willing to take on Construction Manager/General Contractor (CM/GC) jobs because the cost estimates are done upfront and the risk is shared, ensuring that things get done more quickly at the lowest possible cost.

Keep in mind agencies are looking for ways to squeeze every dollar for all it’s worth and innovation in bidding and contracting is a proactive option. For example the practice of contractors actually taking the lead and offering innovative changes in both bids and contracts, sometimes after approaching an agency unexpectedly, while not commonplace, has its successes. (For more on CM/CG and other options see our Financial District story on ways contractors can adapt to changes that are resulting in a wider variety of delivery methods and changes in the qualifications of who can compete. Page 28.)