Research Portal

April 10, 2023

ACT²: Time–Cost Tradeoffs from Alternative Contracting Methods

Choi, Kunhee, Bae, Junseo, Yin, Yangtian, and Lee, Hyun Woo. (2014). ACT²: Time–Cost Tradeoffs from Alternative Contracting Methods. Journal of Management in Engineering, 37(1).

View Publication


Incentive/disincentive (I/D) and cost-plus-time (A+B) are two of the most widely used alternative contracting methods (ACMs) for accelerating the construction of highway infrastructure improvement projects. However, little is known about the effects of trade-offs in terms of project schedule and cost performance. This study addresses this problem by creating and testing a stochastic decision support model called accelerated alternative contracting cost-time trade-off (ACT2). This model was developed by a second-order polynomial regression analysis and validated by the predicted error sum of square statistic and paired comparison tests. The results of a descriptive trend analysis based on a rich set of high-confidence project data show that I/D is effective at reducing project duration but results in higher cost compared to pure A+B and conventional methods. This cost-time trade-off effect was confirmed by the ACT2 model, which determines the level of cost-time trade-off for different ACMs. This study will help state transportation agencies promote more effective application of ACMs by providing data-driven performance benchmarking results when evaluating competing acceleration strategies and techniques.


Errors (statistics), Project management, Benefit cost ratios, Regression analysis, Construction costs, Infrastructure construction, Contracts and subcontracts, Construction methods