Statistical Comparison of the Performance of Alternative Contracting Methods in Florida

Abstract

This study empirically examines the performance of alternative contracting methods using data from 2,721 highway projects gathered from a Florida Department of Transportation database. Contracting methods can significantly influence the cost and time of highway projects, so it is essential to use appropriate contracting methods in highway projects, especially considering the huge current volume of work and great need for more lane miles and new bridges. The most widely used alternative contracting methods in horizontal construction include Design–Build Major, Design–Build Minor, Cost Plus Time, Incentive/Disincentive, Lump Sum, and No Excuse Bonus. These have been devised to overcome shortcomings of the conventional Design–Bid–Build (DBB) method; however, their actual performance in practice has not previously been rigorously studied. To fill this gap, we statistically analyze our sample of highway projects using the Shapiro–Wilk test, Levene’s test, Kruskal–Wallis test, Wilcoxon–Mann–Whitney test, and Dunn’s test for unequal sample sizes. Another unique contribution of this research is the analytical techniques employed, which led to more reliable results based on the large quantity of data gathered. We find that some contracting methods performed better than others in each cost category for cost and time, and based on average cost and time savings, but not all were confirmed statistically. All seven contracting methods performed better in achieving time reductions than cost reductions, and all methods were more effective in reducing the cost and time of projects worth less $20 million than those worth over $20 million.