Suitability Analysis of Existing Construction Cost Indexes for the Minnesota Department of Transportation Construction Projects

The suitability analysis presented in this paper was conducted during the development of an Indefinite Delivery/Indefinite Quantity (IDIQ) implementation guide for the Minnesota Department of Transportation (MnDOT) in an effort to find a fair and equitable approach to adjust unit prices in multi-year, single award, IDIQ contracts. However, this analysis is not restricted to contracts executed using IDIQ alone. This study compares the ability of several composite Construction Cost Indexes (CCIs) to reasonably estimate actual overall cost changes in MnDOT highway construction projects. The paper presents a qualitative analysis of general principles and assumptions associated with the development, maintenance, and use of CCIs. This analysis highlights the mismatch and lack of proportionality between CCI components and actual project activities as factors that hinder the efficient use of CCIs. The paper also presents a statistical analysis of twelve different composite indexes, including one published and maintained by MnDOT. All indexes were applied to four different types of projects over a five- year period. The paper concludes that MnDOT should develop an alternative price escalation method since all CCIs yielded values significantly different to those observed in MnDOT historical bid data.

• Supplemental Notes:
  • This paper was sponsored by TRB committee AFH10 Construction Management. Alternate title: Suitability Analysis of Existing Construction Cost Indexes for Minnesota Department of Transportation Construction Projects
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Rueda, Jorge A
  • Gransberg, Douglas D
• Conference:
  • Transportation Research Board 94th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2015-1-11 to 2015-1-15
• Date: 2015

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: 16p
• Monograph Title: TRB 94th Annual Meeting Compendium of Papers

Subject/Index Terms

• TRT Terms: Construction projects; Cost indexes; Qualitative analysis; Road construction; Statistical analysis
• Identifier Terms: Minnesota Department of Transportation
• Subject Areas: Administration and Management; Construction; Finance; Highways; I10: Economics and Administration; I52: Construction of Pavements and Surfacings;

Filing Info

• Accession Number: 01555163
• Record Type: Publication
• Report/Paper Numbers: 15-2293
• Files: TRIS, TRB, ATRI
• Created Date: Feb 26 2015 10:03AM