Performance Contracting A State Agency Perspective

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Performance ContractingA State Agency Perspective
Steven DeWitt, PE Chief Engineer North
Carolina Turnpike Authority
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?
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Agenda

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

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Is There A Problem?

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

Reality Doesnt Always Meet Expectations
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Is There A Problem?

• State Agencies Dont 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

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Project Development Implementation
I cant believe they left this en piece of
for me to live with!
I guess this is what they meant. I am sure they
can build it this way!
I cant build this! Who the dreamed this
up!
I am sure this will work!
Bridge To New Island
Bridge To Nowhere
Bridge To No Wheland
Typical Silo Approach
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How About the Contracting Industry?

• Low Bid
• Bid the Contract
• Get the Project
• Build the Project
• Move on
• What About Long Term Performance?

Low Bid Contract for Project 345657 The New
Island to Nowhere Connector
New Island
Nowhere
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How About the Contracting Industry?

• Rely on State Agency Specifications, Means
  Methods, Inspection

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Can We Transition?
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Why Performance Contracting?

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

A Changing Transportation World
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The New Island Nowhere Connector
Typical Section Station 13200 to 25632 l-
Project Scope
AASHTO Design Guide Specifications Utility
Manual Noise Policy NEPA Process Asphalt Designs
MPO Commitment Water Sewer Issues Signing
Policy ITS Requirements Hydraulic Openings FEMA
Requirements
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
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Benefits

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

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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

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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
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Existing Examples of Performance
Specifications/Contracting

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

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National Activities

• Performance Specifications WG
• Highways For Life
• SHRP II
• Construction Management ETG
• Other Stuff

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Challenges

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

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Challenges

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

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Risk

• DOT Gets Stuck With the Product Must
  Maintain it

• Long Term Performance Contracting Could Open
  Doors for Much Greater Acceptance of Innovation.

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Bottom Line

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

Make The Business Case