Development of a simulation model to predict the impact of incentive contracts on transportation construction project time performance

Many state highway agencies use incentive contracting methods to improve highway construction project time performance. In general, while reducing project construction time will reduce driver inconveniences caused by construction, few studies have been conducted to evaluate the efficiency of incentive contracting for highway construction projects. Thus, this study focused on developing a model to predict incentive project time performance and to suggest approaches to improve project time performance for Florida Department of Transportation (FDOT) highway construction. A decision-support simulation model using Monte Carlo simulation methods was developed to analyze and improve the efficiency of incentive contracting using key factors in FDOT highway construction projects. The simulation results are presented in the form of probability distributions. The model for the incentive project will be a useful tool for FDOT project planners in that, based on historical data, the simulation results give the planners a complete picture of all possible outcomes. Results of each future project will increase the database and improve the predictive power of the model. The present model will answer the following questions about using incentives for FDOT highway construction projects: (1) For a given project situation, how effective were the incentives in improving project time performance? (2) What levels of project time performance can the MOT project planner expect for a specific project situation? and (3) Which variables are the most dominant factors that affect project time performance for an incentive project? Thus, the present model can assist the planners during their decision-making process. In addition, the effective use of incentives will benefit the traveling public by saving them time and unnecessary delays.