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Description
In most states, public entities are permitted to collaborate in service delivery and joint purchasing. Bridge bundling is the practice of delivering small-scale pavement and bridge projects under one multi-project contract (Xiong et al. 37). The aim is to reduce mobilization cost, derive economies of scale benefits, support contractor scheduling, and improve output (Xiong et al. 43). The bundles usually include bridges with comparable features that are situated on country roads to minimize traffic impacts.
Missouris Safe & Sound Bridge Program
In 2008, the Missouri Department of Transportation (MoDOT) undertook this five-year program to rebuild or replace 802 bridges in a severe or poor state. The total cost was $685 million financed through indirect GARVEE bonds paid as 24 annual reimbursements of $50 million (MoDOT). The amount constituted about a third of the Federal budget MoDOT gets annually for bridge replacement. The scope of the project covered the rehabilitation of 248 bridges and the reconstruction of another 554 by December 31, 2013 (Federal Highway Administration). The program was accomplished ahead of time; it took 3.5 years, not five years as initially planned. The project delivery method involved design-bid-build (DBB) for rehabilitation and design-build (DB) for bridges earmarked for replacement. Procurement entailed the MoDOT inviting bids in clusters based on-site, nature of repairs, or project size (Federal Highway Administration). Five companies won the contract to restore 248 bridges. The remainder (earmarked for replacement) were bundled into one design-build contract and awarded to KTU Constructors.
Moving from a P3 Program
Missouris Safe & Sound bridge program represented a shift from the Public-Private Partnership (P3) model to the design-build project delivery method. The P3 approach involves contracts with private contractors or consortia in construction, operation, or financing of infrastructural projects that last throughout the projects lifespan (Tran 2). Thus, the method tends to limit government influence and introduces risk premiums. By bundling projects according to location, nature of repairs, and size under the Safe & Sound program, MoDOT could minimize financing and contracting costs and project planning time under the DBB/DB framework. Therefore, the primary reason for moving away from the P3 model was to ensure the fast delivery of quality bridges at low costs.
Other Bundled Bridge Efforts
Many Departments of Transportation (DOT) have attempted the practice of bundling bridge projects. For example, the Rapid Bridge Replacement program being done by the Pennsylvania DOT involves the reconstruction of 558 bridges in a lousy state through one multi-project contract (Xiong et al. 37). In contrast, Oregon continually invites bids for its bundled projects archived in a database. In 2012, the New York DOT grouped its 2,500 bridges into six statewide DBB and four DB contracts in four areas (Xiong et al. 37).
Advantages of a Bundled Bridge Program
A single bundled contract has distinct advantages over alternate contracting approaches. In my view, cooperative purchasing creates economies of scale in sourcing for materials, resulting in lower costs for individual bridge projects. Additional cost savings may come from improved mobilization (labor and equipment) and flexibility in scheduling that minimizes costly closures. Bundled bridge projects can also attract adequate bidders. As a result, different competitive contract sizes that lend themselves to economies of scale can be formulated for each local contractor. Further, higher efficiency is achieved in logistics (due to road closures) and standard designs, equipment, and skills (Price 1). Other advantages include speed due to local subcontracting and simplicity in the negotiation and management of a single bundled contract.
Bundled Bridge Candidates
A successful bundling program depends on the efficacy of the criteria for identifying bridges to be included in each cluster. The Washington State Association of County Engineers recommends that, for projects over 20ft, bundled bridges must be county-owned, have a sufficiency rating of <50, and be structurally deficient (4). Further, the projected replacement cost must not exceed $5 million. In general, project categories eligible for grouping are those in geographic proximity and those where the engineers cost estimate is higher than the projected cost under the bundled program.
Disadvantages to a Bundled Bridge Program
Bundling concentrates risk in one contractor. As such, the company will often demand a more significant risk premium in a single multi-project contract compared to the total cost of individual contracts (Tran 6). Thus, the state will pay more for this kind of agreement than for separate projects. Moreover, in my view, the impacts on the budget will be more severe to the state when a corporation holding a single-project contract exceeds the budget than when one of the five or smaller contractors does the same. Bundling also means only larger, well-resourced firms can bid for the grouped projects. Thus, it may not attract many bidders.
Non-candidates for a Bundled Bridge Program
Some projects are not suited for bundling. Bridge rehabilitation or replacement may not be possible if the sites are miles apart due to administrative costs and logistical challenges (Xiong et al. 43). Further, work categories that cannot be undertaken simultaneously or sequentially are not ideal for bundling. Traffic impacts due to road closures are reduced through efficient scheduling. A project whose estimated cost (engineer) does not exceed the budget allocated to it under the multi-project contract should not be bundled. Bundling aims to reduce spending in each venture through the economies of scale.
Works Cited
Federal Highway Administration. Project Profile: Missouri Safe and Sound Bridge Improvement Program. U.S. Department of Transportation, Web.
Missouri Department of Transportation [MoDOT]. Safe and Sound Fact Sheet. Missouri Department of Transportation. Web.
Price, Chris. Crumbling Bridges: Now is the Time to Take Action. HNTB Corporation, 2016.
Tran, Dai, et al. A Project Delivery Selection Matrix for Highway Design and Construction. Journal of the Transportation Research Board, vol. 2347, no. 1, 2013, pp. 3-10.
Washington State Association of County Engineers [WSACE]. Bridge Bundling: WSACE Annual Conference. WSACE, 2017.
Xiong, Yingge, et al. Bundling or Grouping Pavement and Bridge Projects: Analysis and Strategies. Transportation Research Record: Journal of the Transportation Research Board, vol. 2613, 2017, pp. 37-44.
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