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Evaluation of Risk in End-Result Specifications for Asphalt Pavement Construction

End-Result Specifications (ERS) for asphalt pavement construction offer potential benefits over method-related specifications. They can be used in conjunction with or replacement of traditional QC/QA specifications as a means to enhance contractor innovation, reduce agency testing burden, and enhance overall pavement quality. Unlike other manufacturing sectors, the measure of pavement quality is not as simple as detecting and quantifying defective items. The quality of pavements is assessed with imperfect measuring tools operated by humans, who may inadvertently or intentionally introduce measurement variability or bias. As a result, the ability to measure quality and assign appropriate payment bonuses and penalties is an imperfect system. This report details the development of a simulation tool which can be used to analyze specification risk and to develop ERS systems with user-managed risk levels. The program, called Simulated Risk Analysis (SRA), computes the risk of overpayment (agency risk) or underpayment (contractor risk) as a function of many factors, including: number of tests, production and measurement variability, bias, pay formula and pay caps, and specification limits. It also considers the quality assurance and third-party testing scheme used. In general, SRA can be used to develop a better understanding of how changes in individual ERS specification parameters can affect the payment risk for the contractor and agency. This knowledge can be used to explore the possibility of developing desirable changes in an existing ERS, such as reducing sample size, reducing risk, optimizing tolerance limits, changing pay factor equations, and the pros and cons of pay factor equations with payment caps.