?

Agenda

• Is There a Problem?
• Contracting Industry?
• Why Performance Contracting?
• Benefits
• National Activities
• Challenges

Is There A Problem?

We Need...

• Quality
• Safety
• Environmental Responsibility
• Reasonable Cost
• Schedule Certainty

Reality Doesn't Always Meet Expectations...

Is There A Problem?

State Agencies Don't Always Have the Best Solution to Get There...

We Do Have Expertise in:

• Planning
• Design
• Contract Administration vs Construction?
• Maintenance

We Do Not Always Pull Them Together Well...

Project Development & Implementation

• Planning: I am sure this will work!
• Design: I guess this is what they meant. I am sure they can build it this way!
• Construction: I can't build this! Who the #&%$ dreamed this up!
• Operations: I can't believe they left this %$#'en piece of *&^% for me to live with!

Typical "Silo" Approach

How About the Contracting Industry?

Low Bid...

• Bid the Contract
• Get the Project
• Build the Project
• Move on...

Low Bid Contract for Project 345657
The New Island to Nowhere Connector

What About Long Term Performance?

How About The Contracting Industry?

• Rely on State Agency Specifications, Means & Methods, Inspection...
• Quality Control? Quality Assurance? Who, Where, What...
• Where is that DOT guy to tell me I am doing this right?

Can We Transition?

Means & Methods
↓
Performance Specifications
↓
Long Term Project Wide Warranties

Why Performance Contracting?

• Design-Build?
• Alternative Contracting?
• Claims?
• Added Work?
• Public, Legislative, Etc. Pressures

A Changing Transportation World...

The New Island - Nowhere Connector

• New Island ↔ Nowhere
• Typical Section Station 132+00 to 256+32 -l-
• Project Scope
  • AASHTO Design Guide
  • Specifications
  • Utility Manual
  • Noise Policy
  • NEPA Process
  • Asphalt Designs
  • Roadway Design Guide
  • Construction Manual
  • 404 Conditions
  • 401 Conditions
  • Parcel #35 Commitment
  • Parcel #46 Commitment
  • Pavement Conditions
  • E & C Requirements
  • R/W Constraints
  • Materials Requirements
  • Steel Design
  • Concrete Pavement
  • MPO Commitment
  • Water & Sewer Issues
  • Signing Policy
  • ITS Requirements
  • Hydraulic Openings
  • FEMA Requirements

Benefits

• Innovation
• Fewer Constraints - Planning & Execution
• Streamlined Agency Project Development?
• Cost Savings?
  • Less Inspection?
  • Less Testing?
  • Freedom = Better Prices?
• Risk Apportionment
• Life-Cycle Considerations

Benefits

More Industry Involvement

• Value Engineering
• Constructability
• Clarity for Bidding?
• Contractor View of "Engineering Economy"
  • Eliminate "Best Guess" Engineering
  • Efficiency in Execution
• Contractors Will Get Better

Contractors Will Get Better?

Home Builders - Specifications, Plans, Details...

• Inspection?
• Means & Methods?

Transportation Contractors - Specifications, Plans, Details...

• Inspection - Yes
• Means & Methods - Yes

Knowledge Gained Through Staying Engaged

Existing Examples of Performance Specifications/Contracting

• A + B Contracts
• M & W Warranties
• Traffic Control Specifications
• Maintenance Contracts
• Many Other Examples...

National Activities

• Performance Specifications WG
• Highways for LIFE
• SHRP II
• Construction Management ETG
• Other "Stuff"

Challenges

• Cultural Issues
• Cost?
• Performance Measures
• Contract Issues

Challenges

• Scope Clarity
  • "You Will Get What You Tell Them You Want"
  • Needs Versus Wants
• Risk!
• Making the Business Case

Risk

• DOT Gets "Stuck" With the Product & Must Maintain it...
• Long Term Performance Contracting Could Open Doors for Much Greater Acceptance of Innovation.

Bottom Line

• What Will it Cost?
• Will It Produce the Results?
• Can We Overcome the Cultural Hurdles?

Make The Business Case...