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Performance Contracting A State Agency Perspective

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  1. Performance ContractingA State Agency Perspective Steven DeWitt, PE Chief Engineer North Carolina Turnpike Authority

  2. ?

  3. Is There a Problem? Contracting Industry? Why Performance Contracting? Benefits National Activities Challenges Agenda

  4. We Need… Quality Safety Environmental Responsibility Reasonable Cost Schedule Certainty Is There A Problem? Reality Doesn’t Always Meet Expectations…

  5. 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… Is There A Problem?

  6. COLA COLA Planning Design Construction Operations Project Development & Implementation I can’t believe they left this %$#’en piece of *&^% for me to live with! I guess this is what they meant. I am sure they can build it this way! I can’t build this! Who the #&%$ dreamed this up! I am sure this will work! BridgeTo New Island Bridge To No Wheland Bridge To Nowhere Typical “Silo” Approach

  7. Low Bid… Bid the Contract Get the Project Build the Project Move on… What About Long Term Performance? How About the Contracting Industry? Low Bid Contract for Project 345657 The New Island to Nowhere Connector New Island Nowhere

  8. Rely on State Agency Specifications, Means & Methods, Inspection… Where is that DOT guy to tell me I am doing this right? Quality Control? Quality Assurance? Who, Where, What… How About the Contracting Industry?

  9. Means & Methods Performance Specifications Long Term Project Wide Warranties Can We Transition?

  10. Design-Build? Alternative Contracting? Claims? Added Work? Public, Legislative, Etc. Pressures Why Performance Contracting? A Changing Transportation World…

  11. Nowhere New Island CL CL The New Island – Nowhere Connector Typical Section Station 132+00 to 256+32 –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 Pavement Conditions E & C Requirements R/W Constraints Materials Requirements Steel Design Concrete Pavement Roadway Design Guide Construction Manual 404 Conditions 401 Conditions Parcel #35 Commitment Parcel #46 Commitment

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

  13. 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 Benefits

  14. 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…

  15. A + B Contracts M & W Warranties Traffic Control Specifications Maintenance Contracts Many Other Examples… Existing Examples of Performance Specifications/Contracting

  16. Performance Specifications WG Highways For Life SHRP II Construction Management ETG Other “Stuff” National Activities

  17. Cultural Issues Cost? Performance Measures Contract Issues Challenges

  18. Scope Clarity “You Will Get What You Tell Them You Want” Needs Versus Wants Risk! Making the Business Case Challenges

  19. DOT Gets “Stuck” With the Product & Must Maintain it… Risk Long Term Performance Contracting Could Open Doors for Much Greater Acceptance of Innovation.

  20. What Will it Cost? Will It Produce the Results? Can We Overcome the Cultural Hurdles? Bottom Line… Make The Business Case…