PROJECT COMPLETION TIMES AND EVALUATION OF BIDDING STRATEGIES WITH BONUSES AND LIQUIDATED DAMAGES. FINAL REPORT

This study presents new estimates of project completion times, construction engineering costs for project overruns, and motorist costs for project overruns. A theoretical model is developed for evaluating alternative strategies for using bonuses and liquidated damages. Research results indicate that the preferred strategy is to use a procedure whereby contractors bid working days. For critical projects it is recommended that a bonus be paid. For other projects, it is recommended that contractors also be required to bid project working days and pay liquidated damages for overruns but receive no bonus for early completion. It is estimated that the total cost for completing projects will be decreased substantially by using improved bidding strategies and larger liquidated damages.

• Record URL:
  • https://library.ctr.utexas.edu/hostedpdfs/tti/412-1F.pdf
• Supplemental Notes:
  • Research study title: Project Completion Time and Project Overruns.
• Corporate Authors:

  Texas Transportation Institute

  Texas A&M University System, 1600 E Lamar Boulevard
  Arlington, TX  United States  76011

  Texas State Department of Highways & Public Transportation

  Transportation Planning Division, P.O. Box 5051
  Austin, TX  United States  78763

  Federal Highway Administration

  1200 New Jersey Avenue, SE
  Washington, DC  United States  20590
• Authors:
  • McFarland, W F
  • Rollins, J B
  • Drammes, R A
  • Buffington, J L
  • Memmott, J L
• Publication Date: 1987-5

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: 63 p.

Subject/Index Terms

• TRT Terms: Bids; Construction; Contracts; Cost overruns; Costs; Incentives; Loss and damage claims; Pay
• Uncontrolled Terms: Bonus system; Construction costs; Liquidated damages; User costs
• Old TRIS Terms: Overruns
• Subject Areas: Administration and Management; Construction; Finance; Highways; I10: Economics and Administration;

Filing Info

• Accession Number: 00472514
• Record Type: Publication
• Report/Paper Numbers: FHWA/TX-87/412-1F, TTI 2-6-85-412-1F
• Contract Numbers: Study 2-6-85-412
• Files: TRIS, USDOT, STATEDOT
• Created Date: Aug 31 1987 12:00AM