INNOVATIVE CONTRACTING PRACTICES

In 1990, the Federal Highway Administration (FHWA) initiated Special Experimental Project 14 (SEP 14), Contracting Practices, to evaluate contracting practices considered to be innovative to the U.S. highway industry. In addition SEP 14 is the vehicle through which the findings and recommendations of the Transportation Research Board Task Force on Innovative Contracting Practices are being validated. The objective of SEP 14 is to identify, evaluate, and document innovative contracting practices that have the potential to reduce the life-cycle cost of projects while maintaining product quality. Although federal statutes and regulations set forth specific federal-aid program requirements, some degree of flexibility exists. The intent of SEP 14 is to explore this flexibility to its fullest. Several innovative contracting techniques have been identified for evaluation, including cost-plus-time bidding, lane rental, design/build contracting, warranty clauses, and incentives for improved quality. Each of these techniques is discussed in this article.