Performance-based dynamic contracting mechanism

Hatice C. Demirel, Jules G. Verlaan and Shahid Suddle

International Journal of Critical Infrastructures, 2012, vol. 8, issue 2/3, 205-215

Abstract: Road infrastructure contracting is becoming more complex due to changing transport needs and new technologies. Transportation agencies are struggling with this increased complexity. Around the world, agencies have developed a variety of methods for undertaking outsourcing initiatives known as performance-based contracting and total asset management planning. This paper investigates how agencies can deal with changing circumstances in the outsourcing of construction and maintenance activities, based upon work in performance-based contracting in the Netherlands. Using data from maintenance contracts from Rijkswaterstaat, we will develop a framework that can be used to compare several contracting practices and establish performance levels by using variables such as performance measurements. Our methodology offers significant improvements to road network performance outcomes, which enables an organisation to maximise value and deliver its objectives in an effective way. The outcomes are useful to transportation agencies for making decisions about contract price methods based on economic rationale.

Keywords: complexity; maintenance contracts; performance measurement; price; value; contract pricing; road infrastructures; critical infrastructures; infrastructure contracting; construction outsourcing; maintenance outsourcing; performance-based contracting; total asset management planning; The Netherlands; road network performance. (search for similar items in EconPapers)
Date: 2012
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