Changes to Price Adjustment Provisions in Construction Management
The content discusses changes in price adjustment provisions for asphalt binder indices, bid indices, and bituminous price adjustment. It covers the removal of standard specifications, the use of specific binder types, and the application of price adjustments on a contract basis. The focus is on using one binder type, published binder pricing, and increasing triggers for price adjustments.
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Changes to Price Adjustment Provisions Division of Construction Management
Asphalt Binder Index PN 530 and 535 2 2010 Conaway Conference
Bid Indices - What we said in 2009. Bituminous Price Adjustment Continue Use Current (2009 & Prior) C&MS Section 401.20 (Standard Specification Language) Used in all contracts to adjust the price of liquid asphalt for all asphalt concrete products based on the PG binder type. Proposed Changes (2010) Use on multi-season projects only. Change to a PN from the Standard Specification. Use a single PG grade as the basis for adjustment, PG 64- 22. Use a single independent reporting source for the index values such as Asphalt Weekly Monitor. Change the trigger to 10%. 3 2010 Conaway Conference
Bituminous Price Adjustment - what we did Index Changes: Removed as standard specification 401.20 Using on contract-by-contract basis (PN 530 and PN 535) Using one binder type for all price adjustments Using AWM to establish index Current month s index available at beginning of next month 4 2010 Conaway Conference
Remove from Specifications Removed specification 401.20 and apply on contract-by-contract basis Basis - FHWA Guidance TA 5080.3: Price adjustment clauses should not be standard specifications Can be applied on a project-by-project basis based on assessment of need 5 2010 Conaway Conference
Use One Binder Type Using one binder grade for index, PG64-22 Basis - Using one index based on one PG binder is the most common method 33 states use only one price adjustment index Only Alabama determines indexes for all PG binder grades used 6 2010 Conaway Conference
Use Published Binder Pricing Using AWM to establish binder price index Basis - FHWA Guidance TA 5080.3: Index must not be susceptible to manipulation 7 2010 Conaway Conference
Increase Trigger Increased triggers 15% on single season projects 10% on multi season projects Basis- FHWA Guidance TA 5080.3: Price adjustment to be triggered by significant change 8 2010 Conaway Conference
ODOT Continues to Evaluate HMA Prices Average HMA Awarded Unit Costs Old Index vs. New Index $756.08 $756.08 $756.08 $800.00 $700.00 $603.60 $603.60 $603.60 $603.60 $600.00 $500.00 $422.92 $422.92 $422.92 $422.92 $422.92 $422.92 $422.92 $261.11 $400.00 $224.78 $204.11 $181.26 $173.17 $161.42 $155.58 $300.00 $135.50 $131.98 $126.35 $120.65 $113.63 $112.78 $105.62 $200.00 $100.00 $- 448E46020, Asph Conc Intermed, Type 1, PG 64-22, 448E46021, Asph Conc Intermed, Type 1, PG 64-22, APP (Spot Leveling) 448E46050, Asph Conc Intermed, Type 2, PG 64-22 448E47020, Asph Conc Surface, Type 1, PG 64-22 448E46904, Asph Conc Surface, Type 1, PG 70- 22M 448E46905, Asph Conc Surface, Type 1, PG 70- 22M, APP 448E50000, Asph Conc Surface, Type 1H (70-22M) AVE Unit Award Price w/PN530 or PN 535 (10/9/09 - 1/14/10) AVE Unit Award Price (10/8/08 - 1/14/09) AVE Asphalt Price Index - "New" (10/09 - 1/10) AVE Asphalt Price Index "Old" (9/08- 12/08) 9 2010 Conaway Conference
Steel Price Adjustment PN 525 10 2010 Conaway Conference
Bid Indices - What we said in 2009. Steel Price Adjustment Continue use Revise the Index Source to more closely reflect steel pricing for products used in transportation projects. Change Designer Note to reflect use on multi- season projects only 11 2010 Conaway Conference
Previous SPA Commodity Table Product Relationship Table B-1 Steel Product (Title) AMM Product Designation (CB) USDOL-BLS PPI (MI, BI) Steel Piling and stay in-place steel casing Structural Steel Structural Steel Expansion/ Contraction Joints Steel Bearing Devices Guardrail Steel Traffic Strain Poles, Supports, and Mast Arms Steel Light Towers, Poles, and Mast Arms Sign Ground Mounted Beam Supports, Rigid Overhead Supports, and Span Wire Supports Steel Railing Corrugated Steel Pipe Prestress and Post tensioning strand Reinforcing Steel Steel Plate, Cut-to-length (National Mills) Average of, Metals and Metal Products (WPU10), Iron and Steel (WPU101), and Steel Mill Products (WPU1017) Steel Rod, high carbon (1050) industrial quality (United States) Steel Bar, Merchant Products, Reinforcing Bar (United States) 12 2010 Conaway Conference
Steel Price Adjustment What we did Reduced the list of eligible steel commodities and revised the index sources: Product Relationship Table B-1 Steel Product (Title) BI, MI Average of lowest and highest 27 to 36 tall, 10 -12 wide flange beams, up to 256 lbs./ft., prices plus scrap surcharge from Nucor-Yamato, SDI, and Gerdau Ameristeel Category 1: Structural Steel Members, Levels UF, 1, 2, and 3 Steel H-Piling Category 2: Structural Steel Members, Levels 4, 5, and 6 Stay in-place steel casing (Piling & Caissons) AMM Product Designation: Steel Plate, Cut-to-length (National Mills) 13 2010 Conaway Conference
Steel Price Adjustment What we did For Category 1, Table B-1: The adjustment indices shall determine the BI and MI values for wide flange beams plus a scrap surcharge as listed. Link: http://www.stld-cci.com/pdf/Price_list.pdf Link: http://www.gerdauameristeel.com/products/mp/pl.cfm Link: http://www.nucoryamato.com/ For Category 2, Table B-1: The Department will post monthly data obtained from the American Metal Market (AMM). The adjustment index (MI, BI) determines the adjustment ratio and the BI determines the raw steel material price for Steel Plate, Cut-to-length as reported for National Mills at the time of bid. 14 2010 Conaway Conference
Steel Price Adjustment What we did New Designer Note: For use on all projects expected to be constructed over a time period of more than one year AND that require steel products listed in Table B-1 of the proposal note. Old Designer Note: For use on all projects that require steel of the types listed in the note. 15 2010 Conaway Conference
Fuel Price Adjustment PN 520 16 2010 Conaway Conference
Bid Indices - What we said in 2009. Fuel Price Adjustment Continue Use Change Designer Note to reflect use on multi- season projects only 17 2010 Conaway Conference
Fuel Price Adjustment What we did Added the following items to the FPA: Select Granular Backfill, Item 840; 0.75 gal./c.y. Rigid Bases and Pavements, Item 888; 1 gal./c.y. 18 2010 Conaway Conference
Fuel Price Adjustment What we did Current Designer Note: This note is to be used on all projects that contain any of the categories of work listed in Table A-1 of this proposal note. Questions regarding this note should be directed to the Office of Construction Administration at 614-387- 2173. No change to date. 19 2010 Conaway Conference
Future Changes 20 2010 Conaway Conference
Proposed Index Posting Changes Current Index Effective Month Proposed Index Cut-off Date Proposed Index Effective Month Index Type Current Index Cut-off Date Posting Month Asphalt PN 530/535 Last Wednesday of the month (i.e. Jan. 27, 2010) Month of Index Date (i.e. Jan. 2010) No change No change Month following Index (i.e. Feb. 2010) Steel (AMM) PN 525 Last Wednesday of the month (i.e. Jan. 27, 2010) Month following Index Date (i.e. Feb. 2010) No change Change to Month of Index Date (i.e. Jan. 2010) Month following Index (i.e. Feb. 2010) Steel (Mill Data) PN 525 Last Wednesday of the month (i.e. Jan. 27, 2010) Month of Index Date (i.e. Jan. 2010) No change No change Month following Index (i.e. Feb. 2010) Fuel PN 520 Last day of the Month (i.e. Jan. 2010) Month of Index Date (i.e. Jan. 2010) No change No change Month following Index (i.e. Feb. 2010) 21 2010 Conaway Conference
Proposed SPA (PN 525) Changes Editorial Changes. Correct the equations as follows SPA = [(MI/BI) 0.90] x BI x Q or SPA = [(MI/BI) 1.10] x BI x Q For Category 1, Table B-1: The Department will post monthly adjustment indices (BI and MI) for wide flange steel beams plus a scrap surcharge using data obtained from the steel producers listed. 22 2010 Conaway Conference
Proposed SPA (PN 525) Changes 2) Identification of the steel product subject to adjustment. a. Documentation package number: PN525 (Insert the steel product title from Table B-1) (Insert sequential package number beginning with 1 ). Example: PN525 Steel Piling 1, PN 525 Structural Steel 2, etc 23 2010 Conaway Conference
Proposed SPA (PN 525) Changes For Category 2, Table B-1: The Department will post monthly adjustment indices (BI and MI) for steel using data obtained on the last Wednesday of the month from the American Metal Market (AMM), based on the price for Steel Plate, Cut-to-length as reported for National Mills. 24 2010 Conaway Conference
Proposed SPA (PN 525) Changes MI = Mill Shipping Index. - Use the adjustment indices from the month the steel was shipped from the producing mill and properly documented. The adjustment indices will be posted on ODOT s website. BI = Bidding Index. - Use the adjustment indices from the month proceeding the month in which the project is bid. The adjustment indices will be posted on ODOT s website. 25 2010 Conaway Conference
Important Points to Note 1. No new indices planned at this time. 2. No retroactive application of proposed Index Changes. 3. All proposed changes are draft. 4. Use price adjustments as per the contract documents not the information presented here. 26 2010 Conaway Conference
Questions 27 2010 Conaway Conference
