Performance Contracting for Construction: Framework for Implementation

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Performance Contracting for Construction
Framework for Implementation

• Mark Robinson, Ph.D., P.Eng., PMP
• SAIC
• 1/22/07

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Overview

• Why Performance Contracting for Construction?
• Framework Purpose
• Stakeholder Involvement
• Framework Contents
• Relation to the Highways for LIFE Program
• Lessons Learned
• Pilot Program
• Next Steps

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Why Performance Contracting for Construction?

• Much of Americas transportation infrastructure
  is reaching the end of its design life and needs
  to be re-constructed
• Traffic levels and the resulting congestion
  levels continue to increase
• FHWA is developing, identifying, and promoting
  new methods to reconstruct highways and bridges
  safer, faster, and better
• Using performance contracting will allow State
  and local agencies to define and communicate to
  contractors specifically what they want to
  achieve
• Contractors will have the flexibility to
  determine how they do the work

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Some Pros and Cons

• Pros
• Introduction of Innovation
• Defined Outcomes
• Contractor Flexibility
• Share of risk and rewards

• Cons
• New approach that requires a culture shift
• May not be applicable to all projects

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Framework Purpose

• To provide State and local agencies with
  processes and materials that they can use to
  accelerate the development of a performance
  contract solicitation package for construction
  contracts
• Meant to be used as a reference guide
• Should help agencies to avoid common obstacles
  and pitfalls

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Stakeholder Involvement

• The project team developed the materials working
  with
• A select group of stakeholders from State DOTs
  and Industry
• Provided guidance and review at the 30, 60, and
  90 stages
• Subject matter experts from FHWA

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State DOT and Industry Stakeholder Group

• Scott Jarvis - Caltrans
• Chuck Suszko - Caltrans
• Gene Mallette - Caltrans
• Peggy Chandler - Texas DOT
• Steve DeWitt - North Carolina DOT
• Kevin Dayton - Washington State DOT
• Dexter Newman - the Kentucky Cabinet

• Sid Scott - Trauner Consulting
• Brian Deery - AGC
• Bob Lanham - Williams Brothers Construction-
• Brian Burgett - Kokosing Construction
• Rich Juliano - ARTBA

Note Participation did not involve formal
endorsement of the final product
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FHWA Subject Matter Experts

• Jim Sorenson
• Mary Huie
• Byron Lord
• Ken Jacoby
• King Gee
• Jerry Yakowenko
• Tracy Scriba
• Chung Eng
• Rudy Umbs
• John Baxter
• Mark Swanlund
• Peter Kopac

• Christopher Schneider
• David Geiger
• Tom Deddens
• Gus Shanine
• Rob Elliott
• Evan Wisniewski
• Jim Hatter
• John Bukowski
• Fred Skaer
• Shari Schaftlein
• Myint Lwin
• And others

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Framework Contents

• Overall process for performance contract
  development
• Guidance on selecting appropriate projects
• Processes, lessons learned, and sample
  solicitation package materials for
• Performance Goals
• Measurement Methodology
• Enhanced Low Bid Award Process
• Best Value Award Process
• SEP-14 Process

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Relation to the Highways for LIFE (HfL) Program

• HfLs mission is to improve the driving
  experience of the American public
• HfL is looking for new ways to build highways and
  bridges safer, faster, better, and less costly
• Performance contracting will be a tool in the HfL
  toolbox
• HfL projects are not required to use performance
  contracting
• Additional consideration will be given to
  projects that propose to use performance
  contracting

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Lessons Learned

• Each project will be different Processes,
  goals, and materials will need to be tailored to
  the individual application
• Performance goals should be SMART Specific,
  Measurable, Achievable, Results-Oriented, and
  Timely
• Performance goals MUST be under the influence of
  the contractor
• The contractor must have flexibility in how they
  perform the work
• Ideally, the performance-based environment will
  start at the concept or design stage

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Pilot Program

• FHWA is currently seeking 4 to 8 agencies that
  are interested in piloting the Performance
  Contracting Framework.
• Pilot states will receive tailored technical
  assistance to help them implement this approach
• Pilot states can propose the use of the framework
  as an innovative approach when applying for
  funding under the Highways for LIFE Program
• For more information on becoming a pilot agency,
  contact Mary Huie at mary.huie_at_dot.gov or
  202-366-3039

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Next Steps

• Perform outreach to recruit agencies to pilot the
  framework
• Provide technical assistance to 4 to 8 pilot
  projects
• Capture information on successes and lessons
  learned
• Prepare case study documents on each pilot
  application
• Revise and update the Framework for broader
  release

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For More Information

• Jim Sorenson, FHWA
• james.sorenson_at_dot.gov, 202-366-1333
• Mary Huie, FHWA
• mary.huie_at_dot.gov, 202-366-3039
• Mark Robinson, SAIC
• mark.d.robinson_at_saic.com, 703-676-2384