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| FHWA > HfL > Technology Transfer > Performance Contracting Framework > Performance Goals |
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The basis of any performance contract is the set of performance goals that defines what the contractor is to achieve under the contract. Development of these goals is time-consuming, and needs to be a group activity within the agency. A goal development process is described in the figure and subsections below.
Figure 3. Process for Defining the Performance Goals and Measures
Click here for text version

The project team followed a similar process (with the exception of not performing the final two steps) to develop a sample set of performance measures and goals. This sample set of goals is presented in the Sample Materials section following the description of the process.
The project team followed a similar process (with the exception of not performing the final two steps) to develop a sample set of performance measures and goals. This sample set of goals is presented in the Sample Materials section following the description of the process.
In defining performance goals, the first internal stakeholder brainstorming session should be focused on defining what the Owner Agency is trying to achieve with the specific project.
For HfL efforts, the general goals have already been defined at a high level. These include improving safety, reducing congestion due to construction, improving quality, and improving user satisfaction. However, the challenge here is to define the specific goals that the Owner Agency will use to judge success on its project.
In performing this step, the Owner Agency should cast a broad net in the brainstorming session and keep asking, "What have we missed?" The Owner Agency should document all of the ideas that are put on the table, whether or not they seem like good ideas at the time. As the Owner Agency moves through the process, it can always discard ideas that do not fit.
The brainstorming ideas at this stage will form the basis of the performance goals. Remember to focus on WHAT to achieve, not HOW to achieve it. The HOW will be up to the contractor to determine.
Once the Owner Agency has its goal ideas from the initial brainstorming session, the Owner Agency needs to consider a number of format issues for turning the ideas into goals. The first is whether the goal set should be detailed or higher-level general goals. The Owner Agency would go the detailed route if it is looking to drive the contractor's work plan at the detailed level. The Owner Agency will have a good idea from the brainstorming session which way to go. If the Owner Agency had many detailed ideas, it would likely go the detailed route. If the Owner Agency had more general ideas, it would go the higher-level general route.
The next issue is whether the Owner Agency should make the goals subjective or objective. Objective goals are generally preferable, especially if there is a national standard process available for measuring performance. Some goals, however, will need to be subjective. That is fine as long as the rating/scoring process is well defined. This will protect both the contractor and the Owner Agency.
Once the Owner Agency has its draft goals down on paper, the question to ask for each goal is, "Am I SMART?" The acronym is as follows:
If the answer is yes to each of these questions for a draft goal, then the goal is likely a good one. If the answer is no, consider revising the goal into a different form or deleting the goal.
Two other questions to ask include:
These last two questions are not go/no go questions, but the answers can impact the amount of effort needed to evaluate performance.
The Owner Agency will also need to make sure that the goals do not conflict with their standard specifications. If they do, the Owner Agency can modify the standard specification language in the solicitation package.
Once the Owner Agency has its draft set of goals, the Owner Agency needs to consider how to organize/categorize the goals. A good way to categorize the goals is by benefit category such as safety, construction congestion, quality, user satisfaction, etc. Another way is to categorize by infrastructure type.
The Owner Agency should place the goals into the various categories, and generate new categories for any goals that do not fit.
First, here are some definitions:
The Owner Agency will need to decide whether it will use pass/fail performance goals or multi-level performance measures.
Pass/fail goals are easier to define, but do not provide as much information on performance. For example, did the contractor just fail the goal or did they badly fail? Did they just pass another goal, or did they truly go the extra mile and exceed the requirement?
If the Owner Agency uses pass/fail performance goals, then the "performance measure" and the "performance goal" are the same thing. If the Owner Agency uses multi-level performance measures, then the measure will include multiple levels of performance. A level of performance is a defined condition or response time. In the multi-level case, the performance goal is the level of performance that is considered a "pass."
If the Owner Agency chooses the multi-level route, the "goal" remains the passing level, and the Owner Agency defines "levels of performance" for the other levels. The Owner Agency will want to make sure that no matter what the outcome, it will fall in to one of the levels of performance. Thus the highest level and lowest level should only have one threshold boundary. The Owner Agency should consider defining a "rejection" level to specify at what level the work is rejected and must be re-done.
The set of "levels of performance" including the "goal" makes up the performance measure. If the Owner Agency chooses the pass/fail route, then they can just stick with the goal.
A large part of determining whether a draft performance goal is achievable - both from the Owner Agency's perspective as well as from the contractor's perspective - is to compare it to the baseline conditions. For example, if the site is experiencing heavy congestion now with no construction in place, it is likely unreasonable to set a goal of no congestion during the construction period. The Owner Agency should compare each goal against the baseline conditions and results achieved in other innovative projects. If the goal seems unreasonable, the Owner Agency should adjust it.
Defining/determining the baseline conditions can involve using available historical information such as crash rates at the site or field data collection to determine current traffic patterns. This will cost money and time, but the information has multiple uses. By providing this baseline information to the contractors as part of the solicitation package, it helps them to better establish their risk level, which helps to get a more accurate price. The Owner Agency will also need this baseline information during the contract to measure performance for some of the defined goals. A number of goals in the sample materials provided in the following section compare performance to "pre-construction" conditions at the site.
The following lessons have been learned in real-world performance contracts:
The following table provides a sample menu of performance measures developed for use on construction projects. This set is largely focused around the overall Highways for LIFE goal set. Each agency will need to develop a set of goals that suits their specific project. This sample menu will provide a head start, and will help to accelerate the process.
The sample performance measures are categorized by benefit category (i.e., safety, construction congestion, quality, time, cost savings, customer focus/user satisfaction, environmental, and innovation), and each performance measure has 5 levels of performance. The "Good" or "4" level is the performance goal, or "pass," which denotes the acceptable level of performance.
For general construction projects, and for HfL projects using performance contracting, owner agencies are encouraged to use this sample set of performance measures as a starting menu, and to develop their project performance measures and goals using a subset of these sample measures and goals. All numbers/values presented are samples and must be set to appropriate levels for the locality and the specific project. Owner agencies should also pay close attention to the "Notes" column for each performance measure for important information on each measure.
This sample set of performance measure and goals should greatly accelerate the process of performance measure and goal definition, because the Owner Agency will not need to start from scratch.
One item to stress is that whatever goals are chosen, they must be under the influence of the contractor for that specific contract.
| Category | Element | PM # | 5 - Excellent | 4 - Good | 3 - Fair | 2 - Poor | 1 - Very Poor | Notes |
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Table Notes: These measures, goals, and values have not been tested and are shown as an example starting point for consideration.
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| Safety | Injuries - (Workers) Contractor / Sub- Contractors on site personnel, Government represent- atives, Consultant, Vendors, Delivery Personnel |
1 | Incident Rate (IR) for Worker injuries is less than 2.0 | Incident Rate (IR) for Worker injuries is less than 4.0 | Incident Rate (IR) for Worker injuries is less than 5.5 | Incident Rate (IR) for Worker injuries is less than 6.5 | Incident Rate (IR) for Worker injuries is greater than 6.5 |
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| Vehicular Crashes | 2 | Site Crash Rate during construc- tion divided by the Crash Rate prior to construc- tion is less than 1.0 | Site Crash Rate during construc- tion divided by the Crash Rate prior to construc- tion is equal to 1.0 | Site Crash Rate during construc- tion divided by the Crash Rate prior to construc- tion is less than 1.2 | Site Crash Rate during construc- tion divided by the Crash Rate prior to construc- tion is less than 1.3 | Site Crash Rate during construc- tion divided by the Crash Rate prior to construc- tion is equal to or greater than 1.3 |
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| OR | ||||||||
| Vehicular Crashes | 3 | Work zone crash rate 20% less than precon- struction crash rate | Work zone crash rate equal to precon- struction crash rate | Work zone crash rate 20% higher than precon- struction crash rate | Work zone crash rate 30% higher than precon- struction crash rate | Work zone crash rate more than 30% higher than precon- struction crash rate |
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| Speed Band | 4 | 95% of the motorists travel at the posted speed limit or less | 85% of the motorists travel at the posted speed limit or less | 75% of the motorists travel at the posted speed limit or less | 65% of the motorists travel at the posted speed limit or less | Less than 65% of the motorists travel at the posted speed limit or less |
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| AND | ||||||||
| 5 | No one travels more than 10 mph over the posted speed limit. | No one travels more than 15 mph over the posted speed limit. | Less than 5% of drivers travel more than 20 mph over the posted speed limit. | Less than 10% of drivers travel more than 20 mph over the posted speed limit. | More than 10% of drivers travel more than 20 mph over the posted speed limit. |
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| Construc- tion Con- gestion |
Travel time / delay during construc- tion | 6 | No motorist delay (as compared to precon- struction travel time) | Rural: Average motorist delay less than 15 minutes (as compared to precon- struction travel time) Urban: Average motorist delay less than 20 minutes (as compared to precon- struction travel time) |
Rural: Average motorist delay less than 20 minutes (as compared to precon- struction travel time) Urban: Average motorist delay less than 30 minutes (as compared to precon- struction travel time) |
Rural: Average motorist delay less than 30 minutes (as compared to precon- struction travel time) Urban: Average motorist delay less than 45 minutes (as compared to precon- struction travel time) |
Rural: Average motorist delay ≥ 30 minutes (as compared to precon- struction travel time) Urban: Average motorist delay ≥ 45 minutes (as compared to precon- struction travel time) |
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| OR | ||||||||
| 7 | Average travel time through the work zone is at least 10% less than the established target | Average travel time through the work zone is equal to or less than the established target | Average travel time through the work zone is 10% higher than the established target | Average travel time through the work zone is 20% higher than the established target | Average travel time through the work zone is greater than 20% higher than the established target |
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| Queue Length During Construc- tion | 8 | No queue | No stopped queue (speed less than 10 mph) | Rural: < ½ mile stopped queue (speed less than 10 mph) Urban: < 1 mile stopped queue (speed less than 10 mph) |
Rural: < 1 mile stopped queue (speed less than 10 mph) Urban: < 2 mile stopped queue (speed less than 10 mph) |
Rural: ≥ 1 mile stopped queue (speed less than 10 mph) Urban: ≥ 2 mile stopped queue (speed less than 10 mph) |
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| 9 | No queue | Rural: < ½ mile moving queue (travel speed 20% less than posted speed) Urban: < 1 ½ mile moving queue (travel speed 20% less than posted speed) |
Rural: < 1 ½ mile moving queue (travel speed 20% less than posted speed) Urban: < 2 mile moving queue (travel speed 20% less than posted speed) |
Rural: < 2 mile moving queue (travel speed 20% less than posted speed) Urban: < 3 mile moving queue (travel speed 20% less than posted speed) |
Rural: ≥ 2 mile moving queue (travel speed 20% less than posted speed) Urban: ≥ 3 mile moving queue (travel speed 20% less than posted speed) |
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| OR | ||||||||
| 10 | Peak period queue length is less than typical precon- struction peak period queue length | Peak period queue length is equal to typical precon- struction peak period queue length | Peak period queue length is 25% greater than the typical precon- struction peak period queue length | Peak period queue length is 50% greater than the typical precon- struction peak period queue length | Peak period queue length is more than 50% greater than the typical precon- struction peak period queue length |
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| Incident Clearance Time | 11 | Non-injury incidents are cleared from the travel lanes within 15 minutes | Non-injury incidents are cleared from the travel lanes within 20 minutes | Non-injury incidents are cleared from the travel lanes within 30 minutes | Non-injury incidents are cleared from the travel lanes within 60 minutes | Non-injury incidents are not cleared from the travel lanes within 60 minutes |
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| Capacity | 12 | Capacity in the work zone [or work zone and alternate route(s)] during peak traffic periods is greater than or equal to the precon- struction capacity | Capacity in the work zone [or work zone and alternate route(s)] during peak traffic periods is greater than or equal to 90% of the precon- struction capacity | Capacity in the work zone [or work zone and alternate route(s)] during peak traffic periods is greater than or equal to 80% of the precon- struction capacity | Capacity in the work zone [or work zone and alternate route(s)] during peak traffic periods is greater than or equal to 70% of the precon- struction capacity | Capacity in the work zone [or work zone and alternate route(s)] during peak traffic periods is less than 70% of the precon- struction capacity |
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| Quality | Quality Index1 | 13 | The Contractor achieves a Quality Index Score of 1.0 | The Contractor achieves a Quality Index Score of 0.8 | The Contractor achieves a Quality Index Score of 0.7 | The Contractor achieves a Quality Index Score of 0.6 | The Contractor achieves a Quality Index Score of less than 0.6 |
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| Pavement Smoothness | 14 | Inertial Profile, IRI less than 45 inches per mile | Inertial Profile, IRI less than 48 inches per mile | Inertial Profile, IRI less than 60 inches per mile | Inertial Profile, IRI less than 80 inches per mile | Inertial Profile, IRI greater than or equal to 80 inches per mile | ||
| Pavement Noise | 15 | Noise less than 94 dBA based on On-Board Sound Intensity (OBSI) Method | Noise less than 96 dBA based on OBSI Method | Noise less than 100 dBA based on OBSI Method | Noise less than 110 dBA based on OBSI Method | Noise greater than or equal to 110 dBA based on OBSI Method | ||
| Time | Overall Project schedule | 16 | Project completed ahead of the contract completion date by 20% | Project completed ahead of the contract completion date | Project completed on the contract completion date | Project completed 1 month after the contract completion date | Project completed more than 1 month after the contract completion date |
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| 17 | Reduce contractor's actual days on the road by more than 20% compared to the State DOT MAX working days | Reduce contractor's actual days on the road by 20% compared to the State DOT MAX working days | Reduce contractor's actual days on the road by 10% compared to the working days | Contractor's actual days on the road is the same as the State DOT MAX working days | Contractor's actual days on the road is greater than the State DOT MAX working days |
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| Schedule Improve- ments | 18 | Reduce working days to complete project by more than 20% when compared to the State DOT's MAX working days. | Reduce working days to complete project by 20% when compared to the State DOT's MAX working days. | Reduce working days to complete project by 10% when compared to the State DOT's MAX working days. | Project is completed in the same number of working days as the State DOT's MAX working days | Project takes more working days than the State DOT's MAX working days |
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| 19 | Achieve a score of < 0.8 using the equation "Actual Working Days divided by State DOT MAX working days" | Achieve a score of < 1 using the equation "Actual Working Days divided by State DOT MAX working days" | Achieve a score between 1 and 1.1 using the equation "Actual Working Days divided by State DOT MAX working days" | Achieve a score of greater than 1.1 and less than 1.25 using the equation "Actual Working Days divided by State DOT MAX working days" | Score is greater than or equal to 1.25 using the equation "Actual Working Days divided by State DOT MAX working days" |
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| Scheduling Milestones | 20 | Complete all major milestones on time, some ahead of schedule | Complete all major milestones on time | Complete 80% of major milestones on time | Complete 50% of major milestones on time | Complete less than 50% of major milestones on time | ||
| Scheduling | 21 | Work is performed 24/7 until the project is complete | No contract days where no work is being performed when work is able to be performed and traffic is impacted in the work zone | 2 contract days where no work is being performed when work is able to be performed and traffic is impacted in the work zone | 7 contract days where no work is being performed when work is able to be performed and traffic is impacted in the work zone | More than 7 contract days where no work is being performed when work is able to be performed and traffic is impacted in the work zone | ||
| Cost Savings | Contract cost savings due to value engineering | 22 | Reduce actual contract growth by achieving a score of < 1 using the equation of final cost divided by original contract allotment | Eliminate actual contract growth by achieving a score of 1 using the equation of final cost divided by original contract allotment. | Minimize actual contract growth by achieving a score > 1 and ≤ 1.1 using the equation of final cost divided by original contract allotment. | Achieve a score > 1.1 and ≤ 1.25 using the equation of final cost divided by original contract allotment. | Actual contract growth is greater than 1.25 using the equation of final cost divided by original contract allotment. |
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| Customer Focus / User Satis- faction | Customer Satisfaction | 23 | Based on survey results, 95% of travelers were satisfied with their driving experience during the project | Based on survey results, 80% of travelers were satisfied with their driving experience during the project | Based on survey results, 70% of travelers were satisfied with their driving experience during the project | Based on survey results, 60% of travelers were satisfied with their driving experience during the project | Based on survey results, less than 60% of travelers were satisfied with their driving experience during the project |
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| Environ- mental | Watershed Quality Manage- ment | 24 | Reduce sediment loads to 10% less than the precon- struction conditions | Reduce sediment loads to 5% less than the precon- struction conditions | Control sediment loads to the level necessary to maintain the precon- struction conditions | Demonstrate an increase of sediment loads to 2% above the precon- struction conditions | Demonstrate an increase of sediment loads to > 2% above the precon- struction conditions | |
| Recycling and Reuse | 25 | Capture and recycle / recover 100% of recyclable materials used on the project | Capture and recycle / recover 90% of recyclable materials used on the project | Capture and recycle / recover 80% of recyclable materials used on the project | Capture and recycle / recover 60% of recyclable materials used on the project | Capture and recycle / recover < 60% of recyclable materials used on the project |
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| Construc- tion Noise | 26 | Noise due to construc- tion work ≤ 90 dBA 100 yards from the construc- tion site. | Noise due to construc- tion work ≤ 95 dBA 100 yards from the construc- tion site. | Noise due to construc- tion work ≤ 100 dBA 100 yards from the construc- tion site. | Noise due to construc- tion work ≤ 105 dBA 100 yards from the construc- tion site. | Noise due to construc- tion work > 105 dBA 100 yards from the construc- tion site. |
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| Inno- vation | Implement- ation | 27 | Implement- ation of project innovations is greater than the project goal | Implement- ation of project innovations is equal to the project goal | Implement- ation of project innovations is greater than or equal to 90% of the project goal | Implement- ation of project innovations is greater than or equal to 80% of the project goal | Implement- ation of project innovations is less than 80% of the project goal |
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Jerry Yakowenko
Office of Program Administration
202-366-1562
gerald.yakowenko@dot.gov