Curbing the High Cost of Road Building Added

By David Newcomb, P.E., Ph.D., and David Moellering, GAPA

As Georgia’s counties and cities receive bids for road projects in the near future, most will be shocked at the increase in prices across the board. This includes increases in the basic materials we use in our roadway projects such as asphalt, concrete, steel, sand and stone. The same price increases most have experienced when fueling vehicles and purchasing goods and services in our communities apply to the business of road building. Rising prices are a harsh reality of the current global economy.

In the current economy, many materials most individuals have always counted on to be readily available are now in shorter supply. Growing economies in China and India seem to have an endless appetite for oil, cement, steel, wood and other mass building materials. Into the mix, add the geopolitical realities of unstable governments in oil-rich countries, natural disasters that disrupt petroleum supplies, and the consolidation of oil companies can leave everyone with a sense of helplessness. Georgians are fortunate to have the best roadway system in the country, a result of the high-quality asphalt pavement placed by our local contractors and DOT’s (Department of Transportation). As we move forward it will be important to consider procurement methods that will foster competitive bids and relative price stabilization.

Contractor Dynamics

It is very important that as local contractors submit their bids, local governments understand the dynamics of what is typically being submitted. Contractors are typically providing professional know how, materials, and the placement of those materials. Over the past year contractors have lost the control they once had over guaranteed, long-term pricing, which was a standard way of doing business for many years.

The guaranteed pricing of materials such as liquid asphalt, fuel, sand and stone is no longer available on a long-term basis. The marketplace has been in such a state of flux that local suppliers have been forced to fluctuate pricing on a monthly basis instead of a quarterly or annual basis.

Add the normal challenge of maintaining a professional workforce and the expectation of local governments to lock in year-long pricing and higher prices are inevitable. As contractors struggle to factor in the pricing risk they face combined with fuel price increases, we are facing a challenging road construction season.

While it is unlikely that any of us are in a position to affect the outcomes of any of these factors, there are a few practices we can employ that will help to reduce the pricing of risk and stretch liquid asphalt supplies as far as possible.

This will require adjustments to cope with the coming hardships, and these adjustments will have to be made soon.

Contractors and agencies will need to move forward together to implement strategies that allow for ways to reduce the liquid asphalt requirement in Hot Mix Asphalt (HMA) while ensuring performance.

Use an Index

One of the easiest ways to reduce the amount of materials price risk that is added to contractors’ bids is to implement an index. The most common index used in our industry is a simple liquid asphalt index. All of the surrounding states in the Southeast (Florida, Alabama, South Carolina) employ indexes for their Asphalt projects.

Here’s how it works.

1. Governmental Agency identifies a monthly liquid asphalt price based on the market conditions for the month, usually determined by polling the suppliers as to their posted price. This should be similar to the number that the contractors use to prepare their bids for that month, as they get their price from the suppliers also.  Remember, unless the projects are simple resurfacing projects, most of your projects will be paved in out months, which is why the risk gets priced in. 
2. As the liquid asphalt price increases or decreases each month, the contract price will be adjusted to reflect the market conditions.  Theoretically any fluctuating costs for the liquid asphalt are covered in the price adjustment.  Other costs remain the same, so the calculation is fair for both parties.   This allows the contractors to reduce the amount of price risk that they are currently facing.

Allow more Recycled Asphalt Pavement

The HMA industry has been recycling on a large scale since the 1970s Oil Embargo. Research on mix properties and modifications to plant equipment were quickly done in response to the asphalt shortages at that time, and within a few years, recycling became a commonplace practice. Over the years, contractors generally stuck with having one stockpile of recycled material and feeding anywhere from 10 to 25 percent Recycled Asphalt Pavement (RAP) into the mix. This produced significant cost savings, and the industry was content to remain at this level of recycling.

It is time to consider means for increasing RAP content even further. RAP is a resource rich in asphalt and aggregate, and just as we test and process virgin materials, so too should we judge the quality of RAP and process it. The sizing of RAP will help to refine its use in HMA. Having two or even three different size stockpiles of recycled material means greater flexibility in designing mixes for specific applications. For instance, in finer surface mixes, an increased amount of fine RAP can be employed, whereas a greater fraction of coarse sized RAP can be used in large stone mixes.

Like any other material in HMA, RAP should be engineered into the mix, not simply dumped. Understanding the asphalt content and gradation will help the mix designer integrate the recycled material in the right proportion and adjust the virgin materials. If used in large quantities, it may be advisable to extract and test the binder to see if it is highly oxidized and brittle. If it is, then the virgin asphalt may be decreased by one grade to ensure that the resulting mix is not brittle.
If a mix using all virgin materials has a required binder content of 5.5 percent, then a 30 percent RAP mix, where the RAP contains four percent asphalt, will reduce the amount of liquid binder by 1.2%. This could reduce the quantity of liquid asphalt by 22 percent. On 10,000 tons of HMA, this means a reduction of 120 tons of liquid AC. At $350/ton, this works out to a savings of $42,000. Obviously, the savings with RAP go beyond just the savings on liquid asphalt, the aggregate in RAP provides just as much, if not more, savings to both parties.

High RAP content mixes may pose special problems in terms of workability and compactability. While this may be aided somewhat by the use of a reduced PG grade of virgin binder, consideration might also be given to the use of additives or processes that improve workability at high temperatures.

RAP has always been a valuable commodity, and its benefit to the industry and its customers is more evident than ever before.

Thinner Overlays

Many times overlays are placed more to correct functional (smoothness) deficiencies than to strengthen the existing pavement. The appropriate use of thinner overlays can be a way of stretching rehabilitation dollars. The use of a 9.5 mm mix that is 1-1/2 inches thick will use 25 percent less material than a 12.5 mm mix that must be placed at two inches thick. Even though a finer surface mix will necessitate the use of a higher asphalt content, money will be saved.
Let’s say the 9.5 mm mix has an optimum asphalt content of 6.5 percent and the 12.5 mm mix has an asphalt content of six percent. This would mean the 9.5 mm mix would have a coverage of 163 lbs/yd2 and the 12.5 mm mix would have 217 lbs/yd2, if they both had a density of 145 lbs/ft2. The 9.5 mm solution uses about 18 percent less liquid asphalt per square yard than the thicker 12.5 mm mix.

Some feel that finer surface mixes will potentially result in more rutting. In fact, research at the National Center for Asphalt Technology has shown that finer mixes are no more prone to rutting than coarse mixes, and they also improve the ride and lessen the traffic noise. Finer surface mixes placed in thinner overlays could serve the function of thicker overlays if structural improvements in the pavement are not needed.

Use the right asphalt for the job

Although it is not necessarily a way to use less asphalt, in many instances less of the expensive asphalt can be used. For critical situations, it may not be wise to sacrifice performance to lessen the initial cost. However, there are instances where more expensive grades of asphalt and polymer modified asphalt are specified when they are not necessarily warranted. Layers that are deeper in the pavement structure, low-volume pavements, and overlays of existing cracked pavement are all circumstances where specifications requiring premium asphalts should be reviewed and changed if necessary.  Premium grades in Georgia can be anywhere from $90 to $100 per ton higher than the standard grades. It is also likely that the standard grades will be somewhat easier to come by in a shortage than the more expensive grades. Using standard grades could result in a $52,000 savings on 10,000 tons of HMA.

If a particular situation does not involve high truck traffic surface mixtures, then question the need for premium asphalt. Slow traffic, high temperatures, and cold temperatures may all be reasons to specify a better asphalt, but simply specifying a particular grade because it can be specified is not a good use of resources.

Conclusion

Few doubt that the coming construction season will pose significant challenges both in terms of the availability and cost of asphalt binder. Relief is needed to ease the burden that the pavement construction industry faces. Much of this can be accomplished through smart engineering and wise decisions. Contractors and agencies need to work together to get through this period of higher costs. Tough times have occurred in the past and we have weathered those. No doubt that business will have to be done differently, but conditions will eventually stabilize and we will figure out how to keep paving roads.

The ideas for saving asphalt presented here are not the only ones available, nor are they exclusive of one another. Using a combination of solutions can result in even greater cost savings in the coming months.   Asphalt pavements continue to be the most versatile, cost effective and highest performing pavements available.  Innovative thinking and a will to change our practices are the keys to curbing the higher costs of road building in coming months.