1. UPDATE ON PAVING PROJECTS “TIMES THEY ARE A CHANGING” VRMCA Fall Convention September 7-9, 2008 Hilton VA Beach Oceanfront Virginia Beach, Virginia Robert R. Long, Jr. ACPA Mid-Atlantic Chapter Executive Director

2. “TIMES THEY ARE A CHANGING” ACPA Northeast Chapter Reorganization Original Northeast Chapter the 13 northeast states from VA to ME In 1999 divided into 3 regions under the Northeast Chapter In 2005 single Chapter structure re- evaluated January 2006, the Northeast Chapter split into 3 separate Chapters

3. “TIMES THEY ARE A CHANGING” ACPA Northeast Chapter Reorganization Benefits of 2005 reorganization –More focused local promotion –Financial support directly from local members –Potential for reduced administrative activities Current structure –Mid-Atlantic Chapter: VA, WV, MD, DE & DC –Pennsylvania Chapter –New York Chapter (NJ and New England currently have no local ACPA representation)

4. “TIMES THEY ARE A CHANGING” ACPA Northeast Chapter Reorganization Current Mid-Atlantic Chapter –Executive Director in VA –Part-time Administrative Assistant in PA –Seeking to fill a fulltime promoter in MD for MD, DC, DE and N. VA). This position has previously been a part-time position. Current Market Focuses: Highways, Airports, and Military/Ports State Concrete Conferences in VA, WV & MD Technical Committees in VA, WV, & MD

5. TIMES THEY ARE A CHANGING” VDOT’s Construction Program Maintenance needs exceed construction budget Federal funds are now used for maintenance, further impacting the funding available for construction More maintenance work under Turnkey Asset Management Services contracts State revenues down

6. VDOT’s Program (Source: current 36-month advertisement listing) Year Number of Projects Programmed Value FY 09 262$888,789,427 FY 10 117$597,266,120 FY 11 72$751,443,852

7. TIMES THEY ARE A CHANGING” VDOT’s Construction Program What is VDOT doing to deliver the program? –PPTA –Design-Build –TAMS contracts –Other service contracts The bottom line is that it is no longer business as usual!

8. “TIMES THEY ARE A CHANGING” Specifiers Look to Innovative Contracting Public Private Partnerships (VA’s PPTA) Corridor Asset Maintenance (VA’s TAMS) Alternate Bidding A+B Bidding A+B+C Bidding Others

9. Public Private Partnership (PPP, P3) Contractual agreement between public and private partners which allows more private sector participation than is traditional. Alphabet soup construction –D-B-B (design-bid-build) –D-B (design-build) –D-B-F (design-build-finance) –D-B-O-M-F (design-build-operate-maintain-finance) Concession –Long term lease of public facilities to a private party the concessionaire

10. Facts about PPPs State/Local government face difficult challenges in a time of fiscal stress and budget deficits Growing infrastructure needs Decaying infrastructure Shared Value between Public and Private –Project Delivery vs. Concessions Sharing the risks

11. The Evolving Federal Role Traditionally, the Federal Government financed highway through 80% grant Pay-as-you-go orientation Since ISTEA, TEA-21, and SAFETEA-LU, DOT began providing alternative or “innovative” forms of non-grant assistance to advance projects Goal is to leverage limited Federal resources –Leverage as co-investment –Leverage as revenue expansion

12. Partnering More Than Financial Risk Share and shift risk Private sector expect return for risk –Public sector – Profit is a bad concept Public sector adjustment –Sharing of assets

13. “TIMES THEY ARE A CHANGING” Specifiers Look to Innovative Contracting Mid-Atlantic Chapter Initiatives –Educate the concrete industry on PPP’s –Establish our industry as players in the PPP arena and get us “to the table” –Explore PPP financing options that we can use to allow competitive proposal development –Push for alternate pavement type bidding

14. Concrete Pavements are Strong, Long Lasting and Cost Effective So, why aren’t they being used more?

15. The Problems Higher Initial Cost Tight Budgets Lack of Specifier Confidence –Poor performance –Lack of experience Comfortable with Asphalt

16. “TIMES THEY ARE A CHANGING” Seemingly out of control asphalt prices make concrete competitive on first cost Liquid AC index jumped from $340 $842 per ton in just over 4 months – that’s a $25 per ton increase for in-place asphalt pavement Availability of liquid AC is becoming a concern Over the last 2 years, the price of asphalt pavement has jumped from about $58 to over $75 and as high as $130 per ton Although cement prices did rise for a while before the big AC increases, prices are lower and stable

18. “TIMES THEY ARE A CHANGING” Seemingly out of control asphalt prices make concrete competitive on first cost What are we seeing? –Specifiers have to deal with doing less work –Increased interest in Alternate Bidding –Design-Build & PPP Teams are reconsidering concrete –Developers are calling about concrete alternate designs and pricing –Interest in concrete overlays is higher

19. “TIMES THEY ARE A CHANGING” Seemingly out of control asphalt prices make concrete competitive on first cost What should we be doing? –Look at work that you typically haven’t because asphalt has been a “lock” –Step up contact with specifiers: municipalities, developers, architects, & engineers and ask if they have reconsidered concrete –Ask if concrete can be bid against asphalt –Look for possible opportunities in the PPP arena

20. Get in the Door with Initial Cost Comparison Compare equal designs Economize the concrete design –Stone base not needed with low volume traffic –Keep joint spacing short (preferably no more than 1.5 times the thickness in feet) –Don’t widen and seal the joints –No mesh reinforcement –No dowels or tie bars needed with less than 8” of concrete

22. Important Conversion Factors Asphalt is 110 lbs per square yard-inch Stone Base is 110 per square yard-inch Cubic yard on concrete is two tons There are 9 square feet in a square yard An inch of concrete over a square is 1/36 th of a cubic yard

23. Project Example An owner has specified a 3.5-inch asphalt pavement on 6 inches of stone What is the cost of that section and can we offer something less expensive and maybe even better?

24. Asphalt Pavement Cost 3.5 in X 110 lbs/sy-in = 385 lbs/sy 385 lbs/2000 lbs/t = 0.1925 t of AC 0.1925 t of AC X $80/t = $15.40/sy 6.0 in Stone X 110 lbs/sy-in = 660 lbs/sy 660 lbs/2000 lbs/t = 0.33 t of stone 660 lbs/2000 lbs/t = 0.33 t of stone 0.33 t of Stone X $19/t = $6.27/sy Total = $21.67/sy

25. Concrete Pavement Cost Equivalent design: AC Structural # = 2.38 –4.75” of concrete on compacted subgrade –4.75” of PC = 2.38 4.75 in/36 = 0.132 cu/sy 0.132 X $75/cy concrete = $9.90/sy Placement, cure and saw = $12/sy Total = $21.90/sy (Note: this is just the pavement cost, with the asphalt design, there will be the added cost of an additional 5” of excavation.)

26. NOW IS OUR TIME!!!! (for concrete pavements) “Times they are a changing in our favor!”

27. THANK YOU! www.midatlantic.pavement.comwww.pavement.com