Date of Award

1-1-2011

Document Type

Campus Access Thesis

Department

Civil and Environmental Engineering

First Advisor

Charles E Pierce

Abstract

State agencies use considerable amounts of asphalt, fuel, concrete and steel in the construction of roads and bridges each year. The cost of construction materials fluctuates during the period of a construction contract and some materials have historically been more volatile than others. During times of price volatility, methods of lessening the financial risk to contractors and state agencies are important. In the past decade, petroleum products (e.g. liquid asphalt binder and fuel) and reinforcing steel experienced considerable swings in cost over relatively short periods of time. There are several methods that can be used to mitigate these risks including but not limited to fixed price contracts, stockpiling materials, and the use of price adjustment clauses. The most common method that has been adopted at most state agencies is the use of price adjustment clauses. This study analyzes price adjustment clauses currently in use by United States Departments of Transportation to determine the factors that most affect reimbursement. This study also seeks to assist the South Carolina Department of Transportation better understand the benefits and risks involved with price adjustment clauses (PACs) of various construction materials.

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