Here, in our first Construction Estimating Benchmark Report, we share our findings. These benchmarks allow you to compare your estimating processes against industry standards.

We would like to thank Accubid, ConEst, Maxwell Systems and Sage for their support. These four leading estimating software vendors helped promote our survey and drive survey responses.

Participant Demographics

Over 100 construction professionals took our survey. They represent a variety of trades and company sizes.

Estimating Systems

The majority of participants use spreadsheets and software for cost estimating. While the verdict is out for participants spreadsheets, the majority of estimating software users say their systems are working.

Bid Statistics

Overall, companies that participated in our survey win 33% of the projects they bid on. However, those that use estimating software produce faster and more accurate bids. They over estimate less than 35% of the time, and under estimate only 5% of the time. On average, it takes them 8.5 days to turn around a bid while it takes spreadsheet users 10.5 days.

Top Estimating Challenges

Regardless of which system is used (i.e spreadsheets, estimating software, etc), there is general agreement over the most difficult costs to estimate. 

Top Estimating Challenges vs Top Estimating Priorities

We were surprised to learn that top priorities do not align with top challenges. For example, while less than 25% of companies consider bid accuracy to be a top challenge, 75% say that improving accuracy of bids and estimates is a top priority in 2012.

Top 10 Estimating Software Benefits

We asked software users to share their opinion on the top benefits and features in their system, along with the top services offered by their software vendor.

While it may be another year or two before we see a strong recovery in the industry, there are regions, construction trades and types of projects that are doing well. For example, some construction companies have found niches (e.g. healthcare) that are doing really well. Others are having success in certain geographies.

“What you find in the United States is interesting. There are pockets of good activity, depending on where you are. Texas, parts of the midwest and even the northeast are doing well.”

Chaney also shared details of Spectrum Version 14, the latest version of Dexter + Chaney’s construction management software. This version was completely redesigned with a new user interface. It’s a 100 percent browser-based system that runs on any operating system – Windows, Mac OS X and Unix – and mobile devices such as Apple’s iPad. Because of the web and mobile devices, people expect a high-quality user experience. So, Dexter + Chaney has introduced a new “single-click” environment where you can navigate in the software anywhere you want in a single click.

“It really changes the user experience,” said Chaney. “We think this will enhance productivity and make it easier to use.”

Visit our Spectrum software page to learn more or to request a demonstration.

I’ve decided to give these proselytizers the recognition they deserve. So, I’m launching a series of articles profiling green contractors. For the first edition, I connected with Kyle Ashley of Green Building Energy Services, a contractor here in Austin. I was surprised to learn that we’ve got our work cut out for us. For a city that prides itself on being progressive, Austin has a lot of old, energy-inefficient buildings.

Before we get into that conversation, meet Green Building Energy Services. They are certified by the Building Performance Institute (BPI) and affiliated with a number of energy conservation organizations, including the Texas Green Network, the Austin EcoNetwork, the U.S. Green Building Council (USGBC) and others. In my conversation with Ashley, we discussed why Austin’s buildings are overdue for retrofits, what types of projects are in high demand and how homeowners can get that highly sought return on investment (ROI).

But before sharing my findings, I want to hear from you. Do you know a construction company that is making a big impact in their community by promoting sustainable design, architecture and/or construction? Let me know. Leave a comment below, email me (houston@softwareadvice.com) or get in touch on Google+.

Austin’s Older Buildings Missing the Mark

We have a lot of work to do in Austin. The majority of our buildings don’t comply with modern building energy codes, such as those established by the State Energy Conservation Office (SECO). As Ashley informed me, “there is a significant opportunity for retrofit and upgrade work in the Austin area. Most buildings are 15 to 20 years old (or older). The number could be as high as 80 percent.”

I was a little surprised when Ashley first shared these estimates. Given that buildings make up 40 percent of our state’s energy use – and nearly 70 percent of electricity use – there’s a great opportunity for us Austin’ites to improve the energy efficiency of our buildings.

Fortunately, Ashley and his team are here to help. They devote most of their resources to work on retrofit projects, and primarily residential projects. “This is where we identified the biggest area to contribute to the community,” said Ashley. “In terms of what we are doing, it is probably 80 percent residential and 20 percent commercial; 80 percent retrofit and 20 percent new construction.”

So what kind of work is in demand? How can we cut our energy use?

Record-Breaking Temperatures = Record-Breaking Utility Bills

Austin just had the hottest summer ever. As you would imagine, our utility bills are also off the charts. So there is a lot of demand from property owners that want to cut utility costs through energy-efficient retrofits.

Ashley and his team find that most issues originate at the building envelope. That is, the ventilation and insulation of a building’s roof, walls, doors and windows.

“There are so many homes with traditional atmospheric vents. Often, they don’t have enough air intake into the attic. The air becomes stale and heats up like a conduction oven. This is common among older homes built out in the hill country, or those in downtown Austin that were built in the 1950s, 60s and 70s.” – Kyle Ashley

Sometimes it’s just a matter of insulation. Older homes may have little to no insulation in walls. So Ashely and his team use non-expanding injection foam to completely fill the wall cavity.

On the commercial side, a common project is roof treatment. Ashley and his team use an expanding spray-foam product to help improve the energy efficiency of offices and retail buildings. According to Ashley, many businesses have flat and untreated roofs. They need better protection to act as a radiant, air and moisture barrier.

What’s the ROI of Green Construction?

The question on every building owner’s mind is, “What’s the ROI?” There are three main measurable improvements Ashely and his team work toward:

1. Financial impacts. Every building is different, but owners can reduce their utility bills 15 percent to 30 percent with energy efficient upgrades. In an extreme example, Ashley participated in a remodel of a home that was replacing siding. They did a complete energy efficient upgrade – radiant barrier in the attic, non-expanding injection foam around the walls and more – and they immediately received a 35 percent reduction.
2. Energy conservation. They collect utility bills before and after a project, then ask for quarterly updates. They’ve noticed an average 20 percent reduction of kilowatt hours in cooling months, and a 20 percent reduction of gas use in heating months.
3. More comfort. When a home is properly ventilated and sealed, homeowners and business owners are more comfortable. They don’t have outside air running through (i.e. cold drafts in the winter), and their homes and buildings aren’t as hot during the summer. So one of the first things their customers end up doing is turning the thermostat up in the summer and down in the winter.

While Ashely suggests hiring a qualified organization to perform a comprehensive energy assessment, building owners can realize energy and cost savings with little investment. By simply changing your behavior, you can conserve and reduce energy consumption without having to do remodels and energy efficient retrofits.

Some quick take-away tips include:

• Don’t set your thermostat more than three or four degrees higher when you leave your home every day. When you return and change it again, your AC has to work significantly harder to make up this temperature change.
• Use appliances in the morning or late evenings.
• Take showers in the morning, not the middle of the day, and take shorter showers.

If you have other ideas, leave a comment below. We also want to hear about other contractors making a difference in Austin and beyond. So share your story below.

Thumbnail image created by Living Off Grid.

Key Takeaways

• Storms in the Northwest and Mid-Atlantic are generating a lot of roofing activity while the Florida market is experiencing pent-up demand due to a lack of storms.
• The most successful contractors are using building data such as the building's roof warranty and work order history to win more jobs in the current economic climate.
• Contractors are demanding a single system to manage their business and want mobile access to their data while in the field.
• Roofing technologies are helping contracting firms take on more projects while maintaining their current employee count.

To compile this list, I went digging through thousands of apps to find the ones most useful to engineers, electricians, contractors and hobbyists. I encountered a lot of resistance (electrical joke, anyone?) wading through these apps stores, but I was finally able to whittle down the universe of apps to the list of 20 featured in this post.

The apps are broken into the 10 best apps for the Android and the 10 best-suited for the iPhone and iPad. Each app description includes the average user rating, number of reviews and (more importantly) the price. If your favorite app didn’t make the list, please leave me a note in the comments section to share with all of us what features and functionality you like best.

Top Android Apps

eTools – 4 stars with 194 ratings | Free
eTools is built for the electrical engineer and hobbyist alike. The app can perform calculations for LED resistors, inductive reactance and capacitive reactance. Developers encourage users to request more features, so feel free to ping them to suggest add-ons. The app works on all Android devices running 1.6 and up.

Electrical Wiring Pro – 4.5 stars with 333 ratings | $1.99
This app determines the proper wire size for the job based on the Ampacity and voltage drop. The app can also output key features such as wire impedance, maximum load and percent voltage drop. All calculations are based off NEC 2006, 2008 and 2011 standards. Works on Android 1.5 and up.

Conduit Runner Pro – 4.5 stars with 64 ratings | $1.99
This app is purely for calculating conduit bends and fills, with added features for pull box sizing. It can perform calculations for 3-bend saddles, parallel runs, offsets and more. The app is currently on version 3.1 and is compatible with Android 1.5 and later.

Ohm’s Law – 4.5 stars with 2,403 ratings | Free
The Ohm’s Law formula is easy enough to use, but it can be difficult to remember. This app makes it even easier to determine the relation between voltage, current, power and resistance. It’s by far the most popular Ohm’s app in the Android marketplace with more than 100,000 downloads. To run the app, users need Android 1.6 or after.

Pire Wheel – 4 stars with 44 ratings | Free
The DIY mathematicians out there will appreciate being able to use the formulas on Pire Wheel to solve for any two unknowns. For those less DIY inclined, Pire Wheel will perform the calculations for you. It’s a pretty basic tool but reviewers praise it for an appealing user interface. This app will run on all Android devices with 1.5 or after.

ElectroDroid – 5 stars with 11,071 ratings | Free
This is Android’s most reviewed electrical app on the market and has more than 500,000 installs. The app can calculate resistor rations, voltage divides and heat dissipation. It also includes several reference tables (e.g. a table for Ampacity). ElectroDroid runs on Android 1.6 or later.

Pinout – 4.5 stars with 266 ratings | Free
Pinout simplifies selecting the right electrical connector for audio, video, network, computer and miscellaneous electronics. The app contains a guide to USB, RCA, HDMI, Scart and several other connectors. This app works on all Android devices running on 1.6 and after.

Electronicoid Free – 4.5 stars with 74 ratings | Free
In addition to a voltage divider and Ohm’s Law calculator, Electronicoid can calculate resistor and capacitor requirements for both series and parallel circuits. The app also includes a reference guide to resistor and capacitor color codes. Electronicoid works with Android devices running on 1.6 or later.

Resistor ID Pro Toolbox – 4.5 stars with 23 ratings | $1.39
This app is designed for electronic engineers and enthusiasts working at the component level. The toolbox allows users to lookup five band resistors with features for reverse lookup as well. Naturally, an Ohm’s Law and reactance calculator is included in the app. Resistor ID is also offered in a free version – both require Android 1.5 or later.

Electrical Calculator – 4 stars with 252 ratings | Free
Electrical Calculator helps determine wire grounding, Ampacity and voltage drop. Features for conduit fill and utility provider reference are in the development phase. The app was recently updated on August 31, 2011 and will work on Android 2.0.1 and up.

Top iPhone & iPad Apps

Electrical ToolKit – 3 stars with 3,776 ratings | Free
This app is a good resource for engineers, technicians and students alike. The app has features for polar versus rectangular calculations, the power triangle, RLC series circuits and more. iPhone and iPad users will need iOS 3.0 or later to run the app.

Electrical Pro – 3 stars with 93 ratings | $6.99
Electrical Pro incorporates more than 180 formulas and 130 charts to provide a diverse set of electrical data. To keep you from burning the building down, the app also has a handy index of safety codes. Electrical Pro will work on Apple handheld devices with iOS 3.1 or later.

Electrical Formulator – 3 stars with 76 ratings | $3.99
Electrical Formulator is developed by the same team that put out Electrical Pro. This is a simplified version of Electrical Pro but still includes wire sizing, impedance and voltage drop calculators. It can work on any iPhone, iPod Touch or iPad with iOS 4.1 or a more recent version.

Electrical Ref – 3 stars with 47 ratings | $0.99
As the name might suggest, this app is mainly a reference tool that can perform several calculations. It has a graphical resistor calculator, 6 circuit schematics and the ability to add your own circuit configurations. Electrical Ref can run on an iPhone, iPod Touch or iPad with iOS 2.0 or after.

iCircuit – 4 stars with 234 ratings | $9.99
In terms of apps reviewed here, this one’s a bit higher end. That’s because it includes a simulation program to test analog and digital circuits with more than 30 different features, such as MOSFETS and digital gates. Because it’s a hardware-intensive app, it’s recommended for use on iPhone 3GS, iPhone 4 or iPad.

Wire Size – 3.5 stars with 56 ratings | $2.99
This app specializes in calculating wire sizing based on NEC 2008 standards. The app takes into consideration the voltage drop and ambient temperature correction factor to decide which wire size is best. It’s best suited for journeyman electricians and construction workers using an iPhone or iPad running on iOS 4.2 or later.

Resistor Color Code – 3.5 stars with 578 ratings | Free
This resistor reference app has support for three and four band resistors in the EIA value system. Specifically, the app supports E6, E12, E24, E48, E96 and E192 resistors. Resistors can be looked up by resistor color band or value. The app works on iPhones, the iPod Touch and iPads with iOS 3.0 or after.

Ohm’s Law – 4.5 stars with 31 ratings | Free
Reviewers tend to comment on the simple design of this app. There’s nothing fancy here, just the ability to solve for unknowns in Ohm’s Law. The app was updated in March 2011 and is currently on version 1.0.3. Ohm’s Law will run with any Apple handheld with iOS 4.0 or a more recent version.

Voltage Drop Calculator – 3.5 stars with 23 ratings | $2.99
Voltage Drop Calculator can figure the voltage drop for both copper and aluminum wiring. The calculations are limited to American standard wire gauges and North American voltages (AC & DC). The app is compatible with any iPhone, iPod Touch or iPad running iOS 4.0 or later.

Engineering Calc – 4.5 stars with 7 ratings | Free
This app is designed for engineers and engineering students. The app can be used as a reference tool for electrical or radio frequency (RF) engineering. Electrical values are based on Ohm’s Law while RF engineering values are generated from Smith’s Chart. Interested engineers and students will need an Apple device running on at least iOS 4.2.

All app ratings and pricing came directly from the Android and iTunes markets respectively.

Before we dive into the details, let’s briefly meet our panel of executives.

George Hague, President and CEO of ConEst
With over 50 years in the electrical industry, George Hague brings deep knowledge and experience to the electrical estimating industry. Prior to launching ConEst, Hague was the President and owner of East Coast Estimators, Inc., which provided sub-contract electrical estimating services in the New England area. Hague has spent the last 20 years running ConEst.

Giovanni Marcelli, Founder and CEO of Accubid
Giovanni Marcelli has been involved in developing electrical estimating systems and educational programs for contractors for more than 20 years. Mr. Marcelli earned a degree in Electrical Engineering from Italy and ran his own electrical estimating business for 14 years in Canada. Mr. Marcelli is a frequent presenter at electrical estimating conferences.

Todd McCormick, President of McCormick Systems
Todd McCormick has been involved in the electrical industry, in one way or another, his entire life. Mr. McCormick has worked as an electrician, estimator, and project manager. Today, he is President of McCormick Systems which he took over for his father, Jack McCormick. Since taking over, McCormick Systems has expanded into plumbing, piping, and mechanical.

Brian Hoffelder, Co-Founder of Vision InfoSoft
Brian Hoffelder manages software development and training for over 12,000 electrical and plumbing contractors using Vision InfoSoft products. He is one of the co-founders of Vision InfoSoft and has over 30 years of combined experience working for and with electrical and plumbing contractors and developing estimating, billing, and pricing software.

Q: What are the current trends that are shaping the electrical estimating industry?

Hague: I believe image recognition software is emerging as the most beneficial technology for estimators right now. Image recognition can save estimators considerable time and effort. Meanwhile, it greatly reduces the cost by removing the need to print drawings. It provides the ability to automatically count devices off a drawing like estimators did off paper drawings, and it does it in a fraction of the time. Further innovation in this area has led to pairing the symbol or device to estimating databases to generate a faster, more accurate takeoff process.

Marcelli: The building information modeling (BIM) concept is impacting the electrical estimating and construction industry as a whole. BIM has the potential to allow the industry to create a digital model that will clearly define the scope and content of work. Once a model is built in the software, we can go into the building process with everything that we need to know. This will reduce changes, create a more collaborative work environment and save time and money. Unfortunately, this technology is at its infancy, and contractors are still learning the BIM process.

McCormick: From what we’re seeing, estimators want bids that are fast and professional, and they need software to help give their bids and company that professional image. The other big thing is having the digital takeoff that brings in a PDF or a TIF to mark it on a screen instead of just using paper reports. In terms of BIM, we’re seeing a lot of contractors use BIM. However, we’re not really seeing it too much in the electrical estimating end of the business. When it comes to executing change orders and things of that nature, that’s where the BIM model is getting used most. I think it will take some time before BIM becomes a viable technology for estimators.

Hoffelder: In the current competitive market, our customers are estimating more jobs and cutting their margins more than ever before. As a result, we see a continued demand for software that will make estimating more efficient and accurate. The most significant trend we have seen is for on-screen takeoff capabilities to automate the estimating process. When plans are transmitted electronically, there is no cost or delay in having prints produced and delivered; a job can be downloaded and reviewed instantly and if the job looks viable, an estimator can immediately start with takeoff.

Q: From your perspective, where do you see the electrical estimating industry heading in the future?

Hague: Estimators today are expected to accomplish what it used to take two or three estimators to do, and in a fraction of the time. Today’s complex bidding requirements are also creating more challenges for the estimator. Detailed breakdowns are required, and the need to change the scope of the project and price quickly and accurately during the estimating process is a common occurrence. Software that can make decisions for the estimator will make the estimator faster and more consistent in the bidding process, but also more competitive, is the future.

Marcelli: Estimators used to go through pages and pages of paper to scale, count and mark up drawings to do an estimate. Today, we have software that allows the contractor to view PDF drawings on the computer screen to mark, count and automate the count, which saves time and keeps the information at your fingertips. The speed of technology adoption in the industry has really surprised me. This leads me to believe that in the future, estimators will be more receptive to digital information and be more willing to the learn new skills required to work within a BIM world.

McCormick: A lot of what we’re hearing is that estimators want integration with other software. Companies want their estimating software to integrate with the software that they’re already using for accounting or project management – and eventually there will be a need for integration with BIM programs. Of course, we offer our own modules for things like project management. But customers want integration to the products that they are already using, and there isn’t much of that out there right now.

Hoffelder: I think the biggest influence on change will be the rapid development of technology that can improve the estimator’s process. As with many jobs, estimators are often expected to produce more with fewer resources. The Internet has put product and pricing information at our instant access and also makes it possible to find and review jobs with a few clicks. Technology will provide untold benefits now and in the future.

Q: Are you seeing any increased interest in software as a service (SaaS) from electrical contractors? Why or why not?

Hague: There has definitely been a gaining interest in software as a service. With electrical contractors in general, however, there has been some reluctance to embrace this technology because of concerns over company security and potential liabilities. But the SaaS model will play a vital role in the future as social media and the convenience of communicating and collaborating with project teams makes electrical contractors more efficient and effective.

Marcelli: For a majority of the contractors, SaaS is not going to be feasible for two reasons. First, estimating is time sensitive. Estimators are worried they might lose connectivity to the software and miss out on a make-or-break job estimate. Secondly, some contractors are fearful of having their data reside somewhere that they cannot keep under lock and key. These two roadblocks lead me to believe that for the next many years, we’re not going to see much SaaS in electrical estimating. However, certain areas, such as project management, are open to and currently using SaaS.

McCormick: It’s something that we are watching for and when the industry shifts that way, we’ll definitely jump and have something for that. However, we aren’t seeing much adoption or desire among estimators for SaaS. There is a worry that the Internet connection and cloud service is not reliable enough. If an estimator doesn’t have access to their software at the time that they have to submit a huge bid, then they may miss out on a bid that can make or break their company.

Hoffelder: We see some interest from our customers in SaaS, and we are listening closely to what functionality would be useful in an online service. Reliability and security are definitely concerns that will need to be addressed before customers consider switching from a desktop environment. As cloud computing becomes more prevalent in other areas of our lives, contractors will also see the benefit of having estimating software available from anywhere, anytime. With the capabilities now built into mobile devices, people will not want to be tied to a desk to do their work.

Q: What innovations do you think have had a significant impact in electrical estimating over the last decade?

Hague: The electrical contracting industry was built on traditional methods with products and building construction that did not change for years. But with new technology innovations, the industry is much different today. The ability for a contractor to adapt and embrace change in software is key. Online, instant access and collaboration continues to be the overall innovation and benefit to electrical contractors as whole. Contractors are now able to process more information faster to meet the needs of the electrical estimator.

Marcelli: One innovation I’ve found extremely useful are the GPS technologies. A GPS station has the ability to digitize an entire room to create a model that will tell you, with an exactness of 0.5 cm, the sizes of all the components and the distances between all the components in the room. That’s extremely helpful to prefabricate anything that’s needed in that room. It has brought us to a digital age and taken us from a time in which we used to measure everything with a measuring tape and the accuracy was nowhere near what digital tools can achieve.

McCormick: The biggest thing I’ve seen is the transfer from paper takeoffs to digital takeoffs. Computer-aided design (CAD) estimating and digital takeoffs have really been the big jumps in the last ten years. A CAD drawing or CAD file can actually tell estimators the exact amount of devices needed and the pipe and wire lengths instantly because there are actual blocks / symbols behind the drawings. If you get a PDF or a TIF drawing, there’s no additional information that comes with the plan. What CAD does is add a layer of intelligence to the estimating program and save the estimator a huge amount of time. CAD file formats are by far the quickest and most accurate.

Hoffelder: Recently, the increase in electronic drawings has had a significant impact on how quickly information is transmitted and how quickly an estimate can be prepared. The improvements in on-screen takeoff programs (enabling them to automatically recognize and count items) have been a huge step toward making the process far less labor intensive and more accurate. Most importantly, the pervasive adoption of high-speed Internet has made the largest impact on electrical estimating. Downloading jobs is now instantaneous. Furthermore, new software versions and pricing changes can be downloaded electronically while software training can be done without the cost or time of face-to-face interaction.

In the latest of our executive interview series, we find out what separates the wheat from the chaff. According to Cofield, there are three reasons why builders are succeeding:

• They must have a strong foundation. In other words, they must have funding in place, be well positioned on land, and have a good product to sell;
• They must have a sales machine, and;
• They must leverage technology.

Watch this video to learn why some home builders are more successful than others.

The green construction practices that have a demonstrated track record can’t gain traction because of an archaic contractor bidding process. And herein lies the problem. A problem that we can no longer afford to ignore given the sheer cost and impact of our highway system.

“Our roads are everywhere. Anywhere you turn, you’re automatically on a road. We can’t get away from them. We step outside of our house and we’re on a road. If we go to a National Park, we take a road. People don’t realize this but [building roads] is one of the highest impact things we do.” – Shane Stathert, Think Green Roads

The need for lower impact roads is a pressing economic issue. Each year, we spend roughly 7 percent of our Gross Domestic Product (GDP) on transportation infrastructure. For fiscal year 2010, that amounted to nearly $1 trillion. A key input to these costs is the amount of asphalt we use. But the costs don’t end there.

A typical two-lane mile stretch of highway uses roughly 25,000 tons of crushed stone, which is what makes aggregate (the base layer for roads) one of the most mined materials in the world. Then there’s the CO2 emissions. The 32,300 lane miles of road the United States paves every year emits millions of tons of CO2. Here’s a conservative estimate.

Constructing a single-lane mile of road emits 1,200 tons of CO2. If we assume every mile of road built is single-laned (yeah right, not in America) then building our roads emits 38,760,000 tons of CO2 every year. That’s the same as the annual energy use of 6 million homes. Seriously, 6 million, stop and think about that for a second.

Needless to say, these exorbitant costs – both fiscal and environmental – left many in the industry wondering: how can we reduce expense and still maintain the quality of road construction? Thus, the green road construction movement was born.

Recycled Materials: A Reliable Aggregate Alternative?

With 94 percent of paved roads covered in asphalt, the first obvious target was determining how excessive use of asphalt could be reduced to minimize economic and environmental impacts. One idea that’s gaining a lot of attention in the green construction movement is the use of recycled materials for aggregate.

The logic is simple: pick a material with a good consistency that would normally sit in a landfill, grind it up and you’ve got an aggregate substitute or aggregate base. Popular fillers and aggregate replacements include rubber tires, roofing shingles and even glass.

Using recycled material for aggregate in this way not only saves money, but it also makes use of a material that would otherwise remain unused. A single lane mile of road constructed with rubber tires will use roughly 2,000 tires and save as much as $50,000. It also diverts rubber tires from landfills where they’d otherwise pile up and present a fire hazard or act as a breeding ground for disease-carrying mosquitoes.

But putting what would otherwise be considered trash into our roads raises a healthy amount of skepticism. What happens when the roads break apart? Is it safe for plastics, rubber and used construction material to be exposed to the elements? What if these wash into our water system?

There is a dearth of research on the environmental costs of using such recycled materials for aggregate or mixing them with asphalt. And using recycled rubber is one of the most promoted ways to green a road today. Both the Green Highway Partnership and National Asphalt Association tout recycled rubber as an environmentally safe and viable alternative.

Because there are few total life-cycle cost analyses available, it will be at least a generation before we know the true impacts of these methods. And while it remains to be seen how these recycled materials measure up as safe alternatives, there’s another, more pressing, issue blocking green road construction: cost-plus contract pricing.

Cost-plus Contract Pricing Is Blocking Green Roads

Even though the case for environmentally sound construction practices is growing, there continues to be a major hiccup in the road: contractors. More specifically, the agreements contractors use, known as "cost-plus pricing," are slowing things down. That’s because in the current road construction bidding structure, there’s a benefit for contractors using excess asphalt and man hours. Thus, there’s less incentive to explore greener methods of road construction.

The contractual stipulation of cost-plus pricing is in place throughout North America (with the exception of North Carolina). The way it works is this: requests for proposals (RFPs) – requests for contractors to bid on a job – typically go out in the fall. By winter, contracts are awarded to the various contractors that win their bids. For the remainder of the year, projects are in process until their completion.

"Once we’ve already extracted the materials, we should be doing everything we can to recycle them in place to minimize the demand and future extraction of oil. Forget about the environment for a second, this is straight economics." – Shane Stathert

Cost-plus pricing was developed to control the variable cost of bitumen involved in the bidding process. Bitumen is the key ingredient of asphalt. Because it’s closely linked to the price of oil, there is a lot of price fluctuation. To safeguard against price peaks and valleys, contractors created a cost-plus pricing stipulation in their bids.

This means that contractors are paid for the cost of their labor plus the cost of the asphalt. So, if a contractor uses more asphalt on a project, they’ll make more money. Since roads are funded from the public coffers, the taxpayers are the ones getting steamrolled. In a system that rewards waste at a fundamental level, green road construction is stuck at an impasse.

Three Green Techniques That Aren’t Given A Chance

There are three common methods of recycling asphalt and using green methods in road construction. Each of them could vastly improve the road construction process if they were given the chance to flourish. However, cost-plus contracting effectively diminishes the use of these techniques. Here’s a brief overview of the types of on-site road recycling that need more support.

Of the three approaches to road recycling, the hot in-place method has the most research behind it. Hadi Dowlatabadi, an environmental scientist at the University of British Columbia, conducted an in-depth study of the hot in-place road recycling method as part of a carbon credits project. In analyzing the environmental and economic benefits, Dowlatabadi found that hot in-place recycling reduces material use by 80 percent and material transport by even more than 80 percent.

Greenhouse emissions and energy use is also minimized. Compared to traditional paving methods, energy use is reduced by 50 percent. At the same time, greenhouse gas emissions are 60 percent lower. With these types of results, you’d think this would be the preferred method of highway construction, right? Right.

North Carolina Sets Standard for Low-cost Green Roads

The lone region that’s scrapped “cost-plus” contracting, North Carolina, is indicative of the untapped potential of green construction. Instead of awarding contractors on a cost-plus basis, North Carolina has established road performance criteria. That means contractors in North Carolina have to bear the cost of asphalt themselves and can use any method available to them as long as they meet the standards set forth by the engineer.

“What [we] need to do is say, ‘Roads need to be paved to this standard, give me the least cost contract.’ Let the contractor take up the risk of the asphalt. If they think they can do it and meet the standard through hot in-place recycling, they’ll do it. They may make more profits in the process, but that is what you want – you want to incentivize more sustainable roads.” – Hadi Dowlatabadi

And guess, what? North Carolina has the lowest cost of road construction in all of North America. Coincidentally, it’s also home to the highest amount of hot in-place recycling. Consider this, in British Columbia it costs $25/square meter to build a road; in North Carolina it costs roughly $19/square meter. It’s no surprise that these lower costs result in higher profits without the need to use more asphalt.

Go Green to Improve Roads & Save Money

In addition to reducing the cost of road construction, incentivizing green construction techniques will help us maintain higher quality roads. With road construction costing less, we’ll be able to repair more of our aging infrastructure. And improving the road conditions has far reaching impacts: it will reduce greenhouse gas emission and, more importantly, it will help save lives.

Studies have shown that poor road conditions account for roughly 10 percent of our greenhouse gas emissions for traffic. Simply improving the conditions of our roads could have a massive ripple effect – not to mention provide an opportunity to reduce the environmental and economic impact from of road construction cradle to grave.

On a more important note, improving the conditions of our roads will reduce the number of car-related fatalities. The National Highway Traffic Safety Administration estimates that roughly one out of three car related fatalities is the result of poor road conditions. Improving the conditions of our highway system could save thousands of lives every year.

Clearly, promoting and rewarding green road construction is in the public’s interest. We just need to get out of the way and make it a reality. Have any thoughts on how we can make it happen? Leave me a comment below.

Thumbnail image created by Zahlm.

Be sure to check out the first two parts in our interview series if you missed them:

• What's Driving Firms to Implement New Construction Software?
• Which Construction Industry Segments Are Most Active in Implementing New Software?

Be sure to watch part one of our interview series if you missed it, and tune in next week for the final video.