Performance Based Contracts Best Practices by xvi15568


Performance Based Contracts Best Practices document sample

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									NCHPR 20-7 Proposal for Performance-based Maintenance Contracting

Performance-based Maintenance Contracting (PBMC) has shown a steady growth since Virginia
DOT’s first contract in 1995. Since then, approximately 49 contracts have been undertaken in
the U.S. Fourteen highway organizations have tried at least one project, with Florida taking the
lead with 21 contracts. There is also extensive experience with this concept in Europe,
Australia, and New Zealand.

While there are many variations on this contracting technique, PBMC generally consists of
identifying routine maintenance needs (e.g., mowing, signs, guardrail, drainage, emergency
response), preparing performance-based requirements , and bundling them to allow a
contractor to manage and direct the work effort to meet these standards. The DOT conducts
oversight of a PBMC contract generally through random inspections. While some DOTs have
procured PBMC with the low-bid process, the more progressive technique is to bid the work as
a negotiated, best value contract. This requires a strong partnership between the contractor and
the DOT throughout the life of the contract.

In April 2005, senior executives and maintenance managers from 16 DOTs met with industry
under the sponsorship of TRB Task Force on Accelerating Innovation in the Highway Industry
(NCHRP 20-54). It was clear that the concept has progressed, with several DOTs committing to
experimental contracts in their states. Building on the consensus developed at this workshop,
the Maintenance Subcommittee would like to develop an AASHTO Guide on PBMC. The study
proposed to assist the Subcommittee will assemble the following:

   1) Summary and thumbnails of contracts conducted to date in the U.S.
   2) Lessons learned from these contracts..
   3) Best practices and lessons learned that have evolved, focusing on all states’ experience,
      including FL, TX, VA, DC, TN, OK and AK.
   4) A guide with suggestions for preparing the in-house work force for PBMC, a discussion
      of risk and risk transfer/sharing issues, guidelines for best value contracting technique
      as they apply to PBMC, a compendium of performance requirements for specific
      maintenance items, and a summary of DOT oversight and quality assurance

This work is estimated to cost $50,000, take 8 months to complete.

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