A general performance model for design-build highway pavement warranty decisions

New challenges are revealed as more projects are delivered and contracted through innovative methods such as design-build project delivery and performance-based specifications. One challenge from the owner's perspective is lack of control, especially over design decisions and construction procedures. Due to this problem, highway agencies have adopted various additional contractual provisions, of which one is warranty. Warranty is intended to be a method of protecting the owner from possible quality defects and also of improving the initial and long-term performance of the facility. The research question is how warranty characteristics (i.e. , warranty period) and other project characteristics impact the performance of highway pavement projects. To answer this question, a decision model was developed to simulate warranty impacts on project performance. Also, simulations were run to estimate the outcomes of projects with varying scope, contracting, and delivery methods in order to examine the impact of project characteristics on warranty decisions and project outcomes. A probabilistic decision-modeling technique, General Performance Model (GPM), is adopted for this warranty decision model. GPM is one method that is being used widely and has been proven to work for both alternative comparison and selection decision. Since GPM has been developed specifically for the purpose of comparing probable performance outcomes for various decision alternatives, it fits the purpose of this research. According to the simulation results, the contract price tends to increase as the warranty period becomes longer and higher-level performance is required. On the other hand, the agency's expected maintenance and repair costs tend to become less with longer and stricter warranty. Where the life-cycle cost (LCC) of a facility is concerned, the simulation shows that warranty is more beneficial for projects with certain characteristics such as sufficient contractor control, innovation opportunity, design-build delivery method, and performance-based specifications. The results of sensitivity analysis show that warranty period and required-performance level influence project outcomes significantly. Among intermediate factors, amount of warranty risk, motivation for quality improvement, and innovation effort were found to be more sensitive than others. A model is constructed to represent some aspects of the dynamic behavior of a real system. Therefore, a properly developed model can serve as a tool for investigating the behavior of the system and predict future outcomes with reasonable enough accuracy. In order to check the validity of the model, the process of requisite-model validation was applied, and a number of checkpoints were examined through expert interviews. Because of the representative nature of the model, a few assumptions had to be made. Also, the model has some limitations due to its method and scope. First, the project outcomes are measured in the form of life-cycle-cost (LCC) only. The performance measures other than LCC are not considered in the model. Also, the timing of warranty decision is limited to after-project development and prior bidding. Warranty decisions at different times, such as warranty option, which is practiced after construction, are not considered in this model. Finally, the model is limited to asphalt highway pavement projects. Although warranties are often used in other types of projects, such as concrete pavement, bridges, and ITS, they were not considered in this research. The model could be expanded to cover a wider range of project types, decision timing and performance measures in future research.