Statistical Assessment of the Cost Effectiveness of Highway Pavement Warranty Contracts

The evaluation of warranty contracts is of great interest to highway agencies that seek innovative ways to manage their assets in the most cost-effective way. This paper demonstrates a statistical approach for evaluating the long-term performance and cost effectiveness of pavement warranties via comparison with similar traditional contracts. This is in contrast to past studies that used descriptive statistics and one-to-one comparisons to evaluate the performance of these two contracting approaches. In this study, random-parameter regression models that account for unobserved heterogeneity were developed to evaluate the performance of warranty and traditional contracts for similar projects on the basis of resulting pavement service life. The projects studied involved structural hot-mix asphalt overlay of crack-and-seat rigid pavements. The warranty projects in the study data sample were found to be 10% more effective in terms of average service life compared with traditional contract projects. Additionally, routine maintenance expenditures after the warranty period were up to 194% higher for traditional contract projects. These results suggest that warranty contracts have higher initial and rest-of-life quality. However, in terms of cost effectiveness (herein defined as the ratio of condition or longevity to lifecycle cost), the results suggest that the traditional contracts in the sample were 6–15% more cost-effective, on average, compared with their warranty counterparts, which could be attributed to warranty contracts’ higher costs.


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  • Accession Number: 01597693
  • Record Type: Publication
  • Files: TRIS, ASCE
  • Created Date: Mar 29 2016 3:04PM