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DOT staff explain incentive/disincentive clauses, testing and lifecycle benefits
Summary
Senior specification engineer Ryan Johnson detailed the department’s use of incentive/disincentive clauses (asphalt mix quality, pavement smoothness, bridge-deck smoothness, contract time), how incentives are capped (typically up to 5% per Federal Highway guidance), and how these provisions improve long-term performance and contractor competition.
Ryan Johnson, senior specification engineer, presented an in-depth overview of incentive/disincentive clauses used in South Dakota DOT contracts and answered commissioners’ questions. He explained the two-part asphalt mix-quality measure (lab air voids plus field density), pavement-smoothness testing with a high-speed profiler using the International Roughness Index (IRI), and a newer bridge-deck/approach smoothness measure used on a small set of bridge projects. He framed the specification approach as a way to allow competition while incentivizing higher-quality outcomes: "By providing that range, we allow for more competition in our bidding... By using incentives, we help to foster a bidding competition, also allowing for... higher quality work," Johnson said.
Johnson addressed how incentives are priced and limited, noting Federal Highway guidance that incentives typically cannot exceed 5 percent of the item, and that an equal and opposite disincentive or corrective remedy is required. He discussed contract-time incentives (A+B bidding), lane/block rental, weather allowances in schedules, fuel adjustment options for contractors, and the department’s lifecycle analyses showing longer pavement service life on projects with targeted specifications.
