Changes to Price Adjustment Provisions Division of Construction Management.

Changes to Price Adjustment Provisions

Division of Construction Management

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Asphalt Binder IndexPN 530 and 535

2010 Conaway Conference

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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%.


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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


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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


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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


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Use Published Binder Pricing

• Using AWM to establish binder price index

• Basis - FHWA Guidance TA 5080.3:– Index must not be “susceptible to

manipulation”


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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”


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ODOT Continues to Evaluate HMA Prices


$- $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00

$10

5.62

$12

6.35

$11

2.78

$12

0.65

$13

1.98

$11

3.63

$15

5.58

$16

1.42

$13

5.50

$20

4.11

$22

4.78

$18

1.26

$17

3.17

$26

1.11

$422.92 $422.92 $422.92 $422.92 $422.92 $422.92 $422.92

$603.60 $603.60 $603.60 $603.60

$756.08 $756.08 $756.08

Average HMA Awarded Unit CostsOld Index vs. New Index

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)

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Steel Price AdjustmentPN 525


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• 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



Previous SPA Commodity Table

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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

Steel Plate, Cut-to-length (National Mills)

Average of,

Metals and Metal

Products (WPU10),

Iron and Steel (WPU101),

and Steel Mill

Products (WPU1017) Prestress and Post tensioning strand

Steel – Rod, high carbon (1050) industrial quality (United States)

Reinforcing Steel Steel – Bar, Merchant Products, Reinforcing Bar (United States)

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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

Category 1: Structural Steel Members, Levels UF, 1, 2, and 3 Steel H-Piling

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 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)

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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.


http://www.stld-cci.com/pdf/Price_list.pdf

http://www.gerdauameristeel.com/products/mp/pl.cfm

http://www.nucoryamato.com/

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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.


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Fuel Price AdjustmentPN 520


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• Fuel Price Adjustment – Continue Use

– Change Designer Note to reflect use on multi-season projects only


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• 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.


Fuel Price Adjustment – What we did


Fuel Price Adjustment – What we did

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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.

Future Changes

2010 Conaway Conference 20

Proposed Index Posting Changes

Index Type

Current Index Cut-off Date

Current Index

Effective Month

Proposed Index Cut-off

Date

Proposed Index

Effective Month

Posting Month

AsphaltPN 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


Month following Index Date(i.e. Feb. 2010)

No change

Change to Month of Index Date(i.e. Jan. 2010)


Steel (Mill Data)PN 525



No change

No change


FuelPN 520

Last day of the Month(i.e. Jan. 2010)


No change

No change

Month following Index (i.e. Feb. 2010)2010 Conaway Conference 21

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.



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…



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.



• 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.



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.

Important Points to Note


Questions

Changes to Price Adjustment Provisions Division of Construction Management.

Documents

Transcript of Changes to Price Adjustment Provisions Division of Construction Management.