EVALUATION OF COST-TIME RELATIONSHIPS FOR CONTRACTORS PARTICIPATING IN COST-PLUS-TIME BIDDING

State Highway Agencies (SHAs) have started utilizing cost-plus-time bidding (A+B bidding) since Federal Highway Agency (FHWA) declared it operational on May 4, 1995. Although this technique has successfully accelerated many projects by incorporating construction time in the bidding competition, a framework to illustrate the interactions of incentive/disincentive (I/D) rates on the competitiveness of contractors participating in the bid competition is yet to be developed. In a previous research, authors indicated that for each bid competition there is an efficient cap for I/D rates which are dictated by the capabilities of contractors in project acceleration. However, the results of previous study were based on the assumption that there is a statistically significant relationship between cost and time. In this study, the entire cost-plus-time projects implemented by the Oklahoma Department of Transportation (ODOT) were investigated. Then the significance of relationship between cost and time were analyzed for each contractor utilizing Analysis of Variance (ANOVA) technique, and the price-time function of each contractor was determined by regression analysis. The results of the analysis indicate that there is a significant relationship between cost and time for the majority of contractors. However, a quadratic relationship is not always significant and for some contractors a linear price-time relationship is significant. The results of this project can be used not only by ODOT to optimize the incentive/disincentive rates but also by contractors to determine the most competitive strategies of other bid participants.