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Routine Maintenance Contracting Information on routine maintenance contracting was collected using the following methods: A survey of the states using the Research Advisory Council (RAC) Listserve as to what they may be may have considered, or may be doing in the area of contracting routine maintenance on state system roads. A literature search of published reports and findings related to results of contracting routine maintenance on state system roads. Survey Below is the survey that was sent to the states using the RAC Listserve. Responses follow. Greetings AASHTO RAC Members: The Missouri Department of Transportation is interested in gathering information regarding routine maintenance contracts. Specifically, what states have considered and/or awarded within the past five years and the basis for the decision. For the purpose of this research, we are interested in all types of routine maintenance contracts including resurfacing projects of all types, winter event response, striping, mowing, and bridge maintenance. I would appreciate you answering the following questions or forwarding it to the appropriate person within your agency to do so. 1. Has your state considered contracting routine maintenance on your roads and bridges? 2. Has your state made the decision to contract out routine maintenance? 3. What type of contract was utilized to administer the routine maintenance? 4. What routine maintenance operations are included in your contracts? 5. What advantages has your state identified through the use of contracting routine maintenance? 6. What disadvantages has your state identified through the use of contracting routine maintenance? 7. Whom in your state could we contact for further information? (Please provide their contact information) There were a total of eight responses to the survey. A summary of the responses follows: Four of the eight responding states – Florida, Indiana, Maryland, and North Dakota – have all instituted contracting on at least a portion of their routine maintenance operations. Two states – Idaho and Mississippi – have not considered contracting routine maintenance at this time. The reason given for not pursuing contracting routine maintenance is that is not cost effective. Florida 1. Yes, both. 2. Yes. 3. We have a variety of contract types we use to perform our routine maintenance of roadways, bridges, and facilities (rest areas): Work Directed contracts o Work Document Driven – Low bid contract where the contract generally describes a focused maintenance activity that needs to be done – as the contract progresses, the contractor is directed specifically what to do when & where by the issuance of Work Documents o Project Specific - Low bid contract where the contract completely describes exactly what to do when & where – there are no issuances of Work Documents Performance contract o Asset Maintenance – Long-term (5 to 20 years) “Best Value” contracts (not low-bid) where private contractors are selected to take over all or most of the maintenance within a certain geographical area or roadway corridor – these are results based, not method based (we do not tell them what to do, we just give end-result performance measures they must meet) o Performance-Based – Same as Asset Maintenance only shorter term, cover less area, cover a few specific activities instead of all or most – these can be low-bid or best-value Accelerated contracts o Fast Response – Contracts that must be procured and completed very quickly, usually due to urgent need of damage repair like a washout or a sinkhole – normal procurement rules are relaxed o Emergency – Contracts that respond to a disaster (almost always hurricanes or fires) which are usually eligible for Federal reimbursement – normal procurement rules are relaxed o Pre-Event – These are Emergency contracts that are set up ahead of time so we are “ready to go” in event of a disaster – special qualification rules are used, normal procurement rules apply Memorandums of Agreement (MOAs) – Agreements with public agencies to perform maintenance on state roads within their jurisdictions 4. See attached handbook detailing all of our maintenance activities. 5. Cost Savings, Performance contracts share risk and liability with contractors (reduces Department risk), Program stability & budget consistency, Performance contracts reduce contract administration and inspection efforts, Greater functional freedom for Performance contractors (can do some things government can’t do), Department is much better suited to handle spikes in maintenance needs and slowdown of maintenance needs (with more salaried staff, harder to gear up and slow down). 6. Contractors generally will perform maintenance at minimum levels required by contracts while maximizing profits (sometimes even unscrupulously), while state forces have no interest in profits and only have interests in doing what is best for taxpayers. We must keep an eye on this fact and have a solid program of identifying and reprimanding unscrupulous contractors. 7. Mike Sprayberry, State Administrator for Maintenance Contracting email@example.com (850)410-5637 Idaho 1. Not at this time. 2. Not at this time. 3. Not Using 4. 5. 6. 7. Steve Spoor, Maintenance Services Manager/Equipment Fleet Manager steve.spoor@itd.Idaho.gov Office: (208) 334-8413 Cell: (208) 859-3083 Indiana 1. INDOT contracts specific activities (i.e. mowing, guardrail maintenance) in certain situations, but has never contracted out total maintenance on a road. It has been considered and researched, but determined not to proceed. 2. No 3. N/A 4. N/A 5. See response to question number six. 6. Our research showed it was not cost effective. 7. Dennis Belter, Maintenance Administration Manager firstname.lastname@example.org Iowa 1. We have considered routine maintenance contracts. 2. We have decided not to contract out routine maintenance at this time. 3. No contracts are being used at this time. 4. There are no routine maintenance operations included in a contract. 5. An advantage is that some routine maintenance may get accomplished with a contract that was not able to get accomplished before with the state resources available at the time. 6. The main disadvantage is that it costs more to do the work. 7. Will Zitterich email@example.com 800 Lincoln Way, Ames IA 50010 (515) 239-1396 Maryland 1. Yes 2. Yes 3. Competitive Sealed Bids based on Low Bid. We have recently been testing the following three Performance Based Asset Management Contracts where the contractor maintains: a. All assets of a segment of roadway (except for traffic barrier and snow removal due to the high risk factors of these assets) b. All assets of a rest area c. Specific assets for an entire county (our test one is for the maintenance of all RPM's, signing, and miscellaneous pavement markings) Note: With the Performance Based Asset Management Contracts we've have re- negotiated a lower monthly cost due to the work requirements being reduced in order to reduce expenditures, requiring. 4. We currently bid the following maintenance contracts: Hand Mowing (includes litter pick-up and trimming) Mowing (includes litter pick-up and trimming) Herbicide Application Brush and tree cutting and stump removal Litter pick-up Line striping Pavement Markings (thermoplastic) Sink hole repairs Highway lighting Curb and gutter and sidewalk Traffic Barrier Raised and recessed pavement markers Graffiti removal Slurry seal Joint and crack sealing Miscellaneous Structure repairs Sweeping Rumble Strip Drawbridge Operation Patching (HMA & concrete) Resurfacing and milling Concrete pavement repairs Noise Abatement wall repairs Fence Repairs Inlet and drainage repairs Snow Removal 5. With the reduction of manpower these contracts allow our maintenance forces to focus on other maintenance tasks. Contractors are specialized in the various types of contract work and are therefore better equipped to do the work. When budgets are reduced, we can significantly reduce expenditures by cutting back on contractual work assignments (whereas state forces cannot be 'laid off' as easily). 6. Once you have reduced state equipment due to non-use (example: mowers) contractors have the edge on their prices, knowing you can't take the operation back without the equipment. State maintenance forces have to be trained in contract administration. 7. Janice M. Harris, Assistant Division Chief JHarris2@sha.state.md.us State Highway Administration 410-582-5550 – Phone 410-582-9862 - Fax Mississippi 1. No 2. We evaluated the process on a route in the late 1990’s and decided the cost was prohibitive. 3. N/A 4. N/A 5. N/A 6. N/A 7. John Vance, P. E., State Maintenance Engineer firstname.lastname@example.org North Dakota 1-4. I think I can answer these first 4 questions just by stating what we do. Our roadway projects are funded largely using Federal Aid. We do not have a large state aid program. Most state aid dollars go into matching the federal program. With that, what we do as far as what can be considered routine or preventive maintenance is: We contract out the first chip seal on a new pavement using federal aid (through a typical construction contract, set of plans, bid opening, etc.). Then we follow up with additional chip seals approximately every 7 years with either construction contracts using state aid (through a typical construction contract, set of plans, bid opening, etc.) or use district forces with district funds (maintenance contract for materials, oil and chips). We have also used federal and state funds to do thin overlays, contract patching, slurry seals, and micro surfacing (through a typical construction contract, set of plans, bid opening, etc.). We also let statewide striping contracts and bridge maintenance contracts using state funds (through a typical construction contract, set of plans, bid opening, etc.). We do not have the equipment to do mainline paving work or long striping projects. We do lay short patches and can stripe our patch work. We are equipped to do our own crack sealing, chip sealing, snow removal and mowing. We tried contract mowing (maintenance contract) on one stretch of road with less than desired results then went back to doing it ourselves. I think the contract was paid by the mile and the cut was not clean. We had to redo it with our own forces again anyway. Our employees were inspecting the work and could have just as well been doing it themselves. 5. If a contractor can do some items, then we don’t have to gear up with all the equipment needed to perform the work with our own forces. Some things the contractor does more of and can do it better. For example: (mainline paving and long patches, chip sealing, slurry sealing, micro surfacing, striping.) 6. For some items we can just do it cheaper and just as good as the contractor if not better. For example: (mowing, snow removal, crack sealing, chip sealing). Typically our employees are not paid as well as contract employees and the contractor needs to make a profit to be in business. Some items need to be done a certain way so they don’t affect other operations down the road such as mowing so it doesn’t affect snow removal etc. It’s hard for the contractor to have this detailed experience. Some things the contractor doesn’t like to do or charges a lot for doing such as tedious work like fixing potholes or cracks prior to chip sealing or paving. The contractor tends to like bigger projects where they can move rapidly. We seemed to have fallen into a good mix over time based on what the contractor does and what we do with our own forces. 7. Mike Kisse, Maintenance Division email@example.com Phone 701-328-4410 Washington 1. Periodically, our state legislature has shown some interest in contract maintenance but it’s never progressed to the point of developing and implementing contracts for state highway maintenance work. This work has traditionally been conducted by state employees and continues to be carried out in this manner. 2. This work continues to be carried out by state employees. There are currently no discussions of any changes in this. 3. N/A 4. N/A 5. Part of past discussions was that there are no clear advantages of contract maintenance compared to having our state employees complete this work. Evaluations of contract maintenance experiences in other states has not shown clear advantages either. Additional information on this issue can be found in a report via this link. http://www.wsdot.wa.gov/Maintenance/Accountability/outsourcing.htm 6. The experiences of other states have shown some disadvantages, or the lack of advantage…see report via web link listed above. 7. Rico Baroga firstname.lastname@example.org (360) 705-7864 Literature Search Most recent literature on contracting highway maintenance comes in the form of guides and best practice publications. Notable exceptions to this include reports covering South Carolina, Indiana, Virginia, Texas, Ontario, and Alberta. All of these States and Provinces have been reviewed at since 2004. A comprehensive evaluation of best practices; however, may require state audits and other primary sources to achieve better conclusions. Abstracts: Identifying the Appropriate Contract Types for Highway Maintenance and Rehabilitation Projects on the Basis of Project Characteristics Link: See Below Innovative outsourcing approaches currently sought by highway agencies aim to reduce costs, increase efficiency, and improve performance. It is often sought to identify which types of contracts are most appropriate for which types of projects. While previous research has provided insight into the factors that affect these characteristics, the findings have often been limited because the relationships between duration, length and cost have not been fully considered. In this study, highway project data from the United States and abroad are analyzed using equation models for the traditional and innovative contract types. Identifying the Appropriate Contract Types for Highway Maintenance and.pdf Performance-Based Contracting—Yes or No: An In-Depth Analysis Link: http://onlinepubs.trb.org/onlinepubs/circulars/ec135.pdf In the fall of 2006 the Indiana Department of Transportation (INDOT) initiated a study to investigate performance-based contracting (PBC) of maintenance operations. One of the main impetuses for the study is that INDOT started a 10-year road-building program called Major Moves that will add more than 1,000 lane miles to the current network. With this addition and coupled with a trend of reduction in maintenance personnel, INDOT is planning how maintenance will be performed. This study evaluated many aspects of PBC and produced an in-depth analysis of PBC. Information on how to implement, pros and cons, and recommendations to consider are described in this paper. Other options are discussed. Outsourcing Versus In-House Highway Maintenance: Cost Comparison and Decision Factors Link: http://www.ces.clemson.edu/t3s/scdot/pdf/projects/SPR%20653.pdf A research project was conducted by Clemson University for the South Carolina Department of Transportation (SCDOT) to examine the relative merits of outsourcing highway maintenance activities as opposed to performing those activities with in-house forces. The project examined the costs associated with maintenance work performed within the state for 20 maintenance-related activities in FY03-04. The project also included workshops conducted in all seven SCDOT district offices to examine subjective factors that impact local decisions as to whether or not it is appropriate to outsource various maintenance activities. Contracted Maintenance Services at the Ministry of Transportation in Ontario Link: http://tinyurl.com/ygdo7lz Following a shift in strategies, the Ministry of Transportation in Ontario has come to consider the privatization of its highway maintenance operations a success. Maintenance work is being delivered to standard, and the province's standards have been reformatted to support the new delivery methods. The ministry has monitored and carried out quality assurance on the contractor's performance and is confident that the ministry's legislated responsibilities are being fulfilled. Contractors have made job opportunities available to the ministry's former staff, thus retaining knowledge within the industry. The Evolution of Highway Maintenance Outsourcing in Alberta Link: http://tinyurl.com/ygpx8c6 In 1995, Alberta Transportation and Utilities took its first steps of many to outsource highway maintenance work. This work covered all summer and winter maintenance of the provincial highway network. Following the outsourcing and prior to the next round of tendering, the department along with the industry conducted a major reengineering of the existing maintenance process. During this period the department also sold its maintenance shops and increased its responsibility by assuming approximately 15,000 km of secondary highways from local municipalities. All of these changes were incorporated into the contracts prior to the second round of retendering. As a result of these changes there were significant savings. Contracting for Road and Highway Maintenance Link: http://www.reason.org/htg21.pdf The condition of the roads and highways in the United States is less than stellar. In order to help the government get more for its money, highway maintenance and construction are often contracted out. This how to guide provides best practices and lessons learned in outsourcing highway projects. A Guide for Methods and Procedures in Contract Maintenance Link: Available only through partner library Contract maintenance is one of many tools used by transportation agencies to meet their goals. This guide summarizes current contract maintenance practices for transportation systems, and is intended to provide an overview of current practices to those agencies considering the use of contract maintenance. While this guide is not meant to serve as a handbook, it does contain sufficient information to differentiate between the types of contract maintenance currently being used, to identify some key issues that should be considered in developing a contract, and to illustrate the potential benefits through case studies. Annual Report on Initiatives for Outsourcing, Privatization and Downsizing Within VDOT Link: http://virginiadot.org/projects/resources/4_09_2008_Final_Outsourcing_Report.pdf The Virginia Department of Transportation (VDOT) is required to report annually on its outsourcing, privatization, and downsizing activity and on efforts for maximizing the generation of revenue from existing assets of the Department. Facing a long-term economic decline, VDOT has sharpened its focus on developing the best possible roadway system, business priorities, and workforce organization to fulfill its mission. This report details activity for 2008. Who Should Fix the Potholes? Link: http://www.governing.com/column/who-should-fix-potholes For some time now, many states, cities and counties have looked to save money by hiring contractors to perform governmental tasks. Debates raged over whether it was fair to government workers to give their jobs to others, but few questions have been asked about whether real savings were inevitable. The Texas Department of Transportation relies heavily on contracted services. But, a 2008 internal audit found that potholes filled by DOT workers cost $23 each to repair while the ones repaired by contractors cost $129 each. Sealing cracks cost $327 per square mile for state workers and more than twice that amount for contractors. Design and engineering work also turned out to be more expensive when it was undertaken outside the department. Progress Report: Department of Transportation Expedites Privatization, But Savings Uncertain; May Be Feasible to Eliminate More Positions Link: http://www.oppaga.state.fl.us/reports/pdf/0330rpt.pdf As recommended in a 2001 report, FDOT has expedited its employee position reduction plan. In some areas, the department demonstrated that its efforts to reduce in-house employees and increase privatization of services have produced cost savings. However, for many programs, the department cannot demonstrate whether such efforts reduced overall costs. In these areas, the department lacks the data needed to compare the costs of state employees providing a service versus private contractors providing that service. The department could reduce the number of employees needed to monitor contracts by expanding its use of asset management and performance-based contracts. However, the department will need to retain sufficient employees to effectively manage and monitor its contracts with private companies. Contract Maintenance Link: http://on.dot.wi.gov/wisdotresearch/database/tsrs/tsrcontractmaintenance.pdf This 2002 WisDOT synthesis outlines the state of highway maintenance outsourcing. It covers several State DOT practices along with one Canadian province. Links to resources and citations are provided as well. Synopsis of WsDOT’s Review of Highway Maintenance ‘Outsourcing’ Experience Link: http://www.wsdot.wa.gov/NR/rdonlyres/8C2B4EEC-8F37-49A8-BEF7- D59E21B5BFDF/0/outsourcing.pdf This paper gathers after-the-fact reviews of highway maintenance outsourcing performance from programs in five states and British Columbia. On inspection, cases are found where costs may have gone up instead of down, services deteriorated rather than improved, administrative and supervisory arrangements proved problematic, and contractor failures left states scrambling to provide services or caught in the distraction of litigation. Despite the range of experiences common themes emerging from these reviews can be translated into “lessons learned” for state officials considering programs of this type. Bibliography: Anastanopoulos, P., Labi, S., McCullouch, B. “Identifying the Appropriate Contract Types for Highway Maintenance and Rehabilitation Projects.” Transportation Research Board 88th Annual Meeting. 2009. See .pdf file above. Anastanopoulos, P., McCullouch, B. “Performance-Based Contracting—Yes or No: An In-Depth Analysis.” Transportation Research E-Circular, No. E-C135. 2009. Online: http://onlinepubs.trb.org/onlinepubs/circulars/ec135.pdf Dlesk, R., Bell, L. “Outsourcing Versus In-House Highway Maintenance: Cost Comparison and Decision Factors.” South Carolina Department of Transportation. 2006. Online: http://www.ces.clemson.edu/t3s/scdot/pdf/projects/SPR%20653.pdf MacLean, M., […] et al. “Contracted Maintenance Services at the Ministry of Transportation, in Ontario.” Annual Conference of the Transportation Association of Canada. 2005. Online: http://tinyurl.com/ygdo7lz Bucyk, N., Lali, M. “The Evolution of Highway Maintenance Outsourcing in Alberta” Annual Conference of the Transportation Association of Canada. 2005. Online: http://tinyurl.com/ygpx8c6 Segal, G., Moore, A., McCarthy, S. “Contracting for Road and Highway Maintenance.” The Reason Foundation. 2003. Online: http://www.reason.org/htg21.pdf “A Guide for Methods and Procedures in Contract Maintenance.” AASHTO. 2002. “Annual Report on Initiatives for Outsourcing, Privatization and Downsizing Within VDOT.” Virginia Department of Transportation. 2008. Online: http://virginiadot.org/projects/resources/4_09_2008_Final_Outsourcing_Report.p df Barrett, K., Greene, R. “Who Should Fix the Potholes?” Governing. 2009. Online: http://www.governing.com/column/who-should-fix-potholes “Progress Report: Department of Transportation Expedites Privatization, But Savings Uncertain; May Be Feasible to Eliminate More Positions.” Florida Office of Program Policy Analysis and Government Accountability. 2003. Online: http://www.oppaga.state.fl.us/reports/pdf/0330rpt.pdf McLawhorn, N. “Contract Maintenance.” CTC & Associates. 2002. Online: http://on.dot.wi.gov/wisdotresearch/database/tsrs/tsrcontractmaintenance.pdf Ribreau, N. “Synopsis of WsDOT’s Review of Highway Maintenance ‘Outsourcing’ Experience.” Washington State Department of Transportation. 2004. Online: http://www.wsdot.wa.gov/NR/rdonlyres/8C2B4EEC-8F37-49A8-BEF7- D59E21B5BFDF/0/outsourcing.pdf
"Routine Maintenance Contracts"