Cost Savings Analysis of Performance-Based Contracts for Highway Maintenance Operations
Publication: Journal of Infrastructure Systems
Volume 16, Issue 4
Abstract
Highway agencies around the world are undergoing major changes in their traditional maintenance practices, including the privatization of entire sections of highway routine maintenance activities. Performance-based contracts (PBC) are an option in such privatizing efforts. This paper presents a methodology to estimate the likelihood and amount of cost savings associated with the application of PBC for highway maintenance operations. Using data on maintenance contracts from around the world, we develop models that can be used to compare several contracting methods and include variables such as contract duration, activity type, and contract size. We find that large projects with strong competition, long duration and extension periods, long outsourced road sections that incorporate crack sealing, pothole repair, illumination repair/maintenance, and mowing activities, favor outsourcing under PBC. Our methodology can be useful to transportation agencies for making decisions about the use of PBC and other methods of maintenance outsourcing at the preplanning phase.
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Acknowledgments
This work was supported by the Joint Transportation Research Program administered by the Indiana Department of Transportation (DOT) and Purdue University. The writers are grateful to Bill Flora (Indiana DOT), Frank T. Richards (Alaska DOT), Susan J. Berndt, Hope Jensen, Nancy Worline and Steven Lund of Minnesota DOT, Lance Davis, Audry Reeves and Steve Foskey of Polk County (Florida), Larry Buttler, Tammy Booker Sims, Bob Blackwell and Kerry Hardy of Texas DOT, Diane L. Mitchell, Dick Kiefer, Roy A. Thacker, and Robert Prezioso of Virginia DOT, for providing contract data and other useful information. Also, the writers would like to sincerely thank Dr. Gunter Zietlow, and Pekka Pakkala (SAIC–Virginia), for their helpful suggestions and comments. The contents of this paper reflect the views of the writers, who are responsible for the facts and the accuracy of the data presented herein, and do not necessarily reflect the official views or policies of the FHWA and the Indiana DOT, nor do the contents constitute a standard, specification, or regulation.
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Information & Authors
Information
Published In
Journal of Infrastructure Systems
Volume 16 • Issue 4 • December 2010
Pages: 251 - 263
Copyright
© 2010 ASCE.
History
Received: Nov 5, 2008
Accepted: May 10, 2009
Published online: Jun 2, 2009
Published in print: Dec 2010
Authors
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