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MD Concrete Conference. Concrete Pavement Performance Contracting “Managing the Asset”. Ted Ferragut, PE 3/22/10. Performance Contracting. What do you get when you combine: Concrete Pavement with Rehabilitation with Preservation with Maintenance, Planned and Unplanned with

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md concrete conference
MD Concrete Conference

Concrete Pavement

Performance Contracting

“Managing the Asset”

Ted Ferragut, PE 3/22/10

performance contracting
Performance Contracting

What do you get when you combine:

  • Concrete Pavement with
  • Rehabilitation with
  • Preservation with
  • Maintenance, Planned and Unplanned with
  • Performance Measures and Specifications with
  • Delivery Methods and a little bit of a
  • Pricing and Financing and LCC?
performance contracting1
Performance Contracting

You get:

  • My Job Description
  • Euro Craziness

or

slide4

Performance Contracting

You get:

Asset Management: Performance Contracting

SHA’s True Role

Industry’s Potential Role

  • From a supplier / contractor
  • To a contractor / asset manager
performance contracting2
Performance Contracting

Ted Ferragut, PE

  • SHRP II Performance Specification Team
  • AMOTIA Executive Director
  • ACPA-MAC Board of Directors
  • Working Groups: TCM / PPP / ARTBA
slide6

Safety, Renewal, Reliability, Capacity

  • Renewal: performed rapidly, causes minimum disruption, and produces long-lived facilities.
    • Performance Contracting / Specifications
association for management and operations of transportation infrastructure assets

Association forManagement and Operations of Transportation Infrastructure Assets

The Contractor’s Voicefor TransportationOperations andMaintenance

slide8

Association for the Management and Operationsof Transportation Infrastructure Assets

Formed in 2007

Represents contractors, engineers, product providers

Mission: To promote the management, operations and maintenance of transportation assets using performance principles.

slide9

Recognized Industry Leaders

  • Experienced in Service Delivery Methods
    • Public Private Partnerships
    • Asset Rehabilitation and Maintenance
    • Asset Maintenance
    • Roadways, Tunnels, Bridges,Operation Centers, Rest Areas
  • FL-DC-VA-MD-AK-NC-TXand growing
slide10

TCM and PPP

  • Innovative Project Delivery
  • Innovative Financing
  • Innovative Ideas
    • US
    • Internationally
slide11

TODAY’S SITUATION

  • Money is scarce
  • Needs are high
  • Public work force is thinning

and

  • Private work force is ….
    • Over skilled
    • Under utilized
conventional approach
CONVENTIONAL APPROACH

Normally, DOT controls:

  • Pavement inventory and condition
  • Fix type and schedule
  • Structural design
  • Functional design
  • Performance standards and measures (normally implied)

And also these:

  • Mix type selection (maybe even mix design)
  • Traffic (constructability) scheme
  • Bid Schedule (low bid, unit price)
  • Construction inspection
  • Construction acceptance
  • Life expectancy (implied)
conventional approach1
CONVENTIONAL APPROACH

Contractor just …

EXECUTES

emerging approach
EMERGING APPROACH

Rather that dictate, ….

  • DOT bids broad performance guidelines
  • Contractor designs, prices, builds, maintains
  • DOT pays based on availability**
  • Contractor meets turn back criteria
slide15

Pyramid of Performance

ride, friction, noise, spray, reflectivity, texture

rutting, faulting, fatigue, cracking, scaling, drainage

USER

comfort, sustainability, investment value, context sensitive

accessibility, delays, long lasting, safety

RULES - MODELS

FUNCTIONAL

AS-CONSTRUCTED

density, air, thickness, strength, modulus,

time-to-construct, geometry, steel location

CONSTRUCTION

transport, placing, curing, sawing,

recycling, clearance/load limitations, worker safety

MIXING REQUIREMENTS

charging, mixing, handling, automation

precast, monitoring (QC)

COMBINED MATERIALS

mix methods, mix components,

virgin vs. recycled, construction schedules

BASIC MATERIALS

aggregate, binder, cement, labor force, material availability, costs

Redefine Roles and Responsibilities

emerging approach1

Design

Const

Maintenance

Design

Const

Maintenance

Performance PaymentInvolvement

D-B-B & Warranty

Anticipated Maintenance

Design

Const

Maintenance

Design

Const

Maintenance

D-B & Warranty

Performance PaymentInvolvement

EMERGING APPROACH

Material & Workmanship

Short-Term Performance

Long-Term Performance*

Design-Build Finance Maintain*

emerging approach2

Design

Design

Design

Performance

Acceptance

Funding

Funding

Funding

EMERGING APPROACH
pavement asset manager
PAVEMENT ASSET MANAGER
  • DOT describes performance over time and turnback condition.
  • Contractor proposes products, timing, work sequence, and performance (availability) payment.
  • They negotiate!!
pavement asset manager1
PAVEMENT ASSET MANAGER

Project Delivery Method

  • Team Pre-qualification (Short list)
  • Best Value
    • Design-Build-Maintain-Operate
pavement asset manager2
PAVEMENT ASSET MANAGER

Payment Model

10 – 20 year contract length: See your scheme work!!

pavement asset manager3
PAVEMENT ASSET MANAGER

Understanding / Sharing Risk

  • Existing Surface Condition
  • Existing Structural Condition
  • Performance Standards
    • Functional: smoothness, friction, noise, aesthetics, cracks
    • Structural: support, load transfer, potholes, punchouts, faults
  • DOT audit / inspection
  • Future Traffic Projections
  • Roadway access
  • Payment Fee
pavement asset manager4
PAVEMENT ASSET MANAGER

Risk Transfer

  • With more design, material, constructability freedom given to the Asset Manager, the DOT can mitigate its risk with higher performance standards and a longer performance period.
  • The more risk assumed by Asset Manager, the higher the fee.
pavement asset manager5
PAVEMENT ASSET MANAGER

Contractor A vs Contractor B

  • Rehab Scheme
  • Length of Fix
  • Patching
  • Sealing
  • Grinding
  • Overlay
  • Quality of Work
slide24

PAVEMENT ASSET MANAGER

Incentive / Disincentive System

  • Above Targets (Year)
    • Bonus payments
    • Contract extension
  • Below Targets (Year)
    • Reduced Payments

$$$$$$

$$$$$$

pavement asset manager6
PAVEMENT ASSET MANAGER

Overcomes Shortfalls

Of

Design – Bid – Build

And

Warranties

pavement asset manager7
PAVEMENT ASSET MANAGER

Pay

For

Performance

slide27

TOTAL ASSET MANAGER

But why just do the pavement?

  • Striping
  • Shoulders
  • Ditches
  • Mowing
  • Signing
  • Fencing
  • Guardrail
slide28

TOTAL ASSET MANAGER

But why leave out operations?

  • Snow and Ice
  • Emergency Response
slide29

TOTAL ASSET MANAGER

  • Contract Length
  • Directed vs. Managed Work
  • Emergency/Disaster
    • Services
    • Snow/Ice
    • Hurricanes
  • Incident Response
  • Partnership Agreements
  • Bonding
  • NBIS Bridge Inspection/Fix

Basics of PC

Qualification-based Contracting

Performance Specifications

Cost Estimates

Level of Service

Oversight/Inspection

Third Party Damage

Prison Labor

Bundled Work vs. Line Item

total asset manager
TOTAL ASSET MANAGER

Advantages

  • Promotes private sector innovation
  • Establishes performance as goal
    • Pavement, bridge, & routine maintenance
  • Competes asphalt vs concrete preservation
  • Commits funds
  • Move DOT resources to other critical areas
  • Allows DOT to govern and manage
  • Allows Private Sector to execute

Disadvantages

  • Priorities change
  • Long term committment but minimal partnering between DOT and contractor
  • Changing performance requirements and testing methodologies
slide31

Pyramid of Performance

ride, friction, noise, spray, reflectivity, texture

rutting, faulting, fatigue, cracking, scaling, drainage

USER

comfort, sustainability, investment value, context sensitive

accessibility, delays, long lasting, safety

RULES - MODELS

FUNCTIONAL

AS-CONSTRUCTED

density, air, thickness, strength, modulus,

time-to-construct, geometry, steel location

CONSTRUCTION

transport, placing, curing, sawing,

recycling, clearance/load limitations, worker safety

MIXING REQUIREMENTS

charging, mixing, handling, automation

precast, monitoring (QC)

COMBINED MATERIALS

mix methods, mix components,

virgin vs. recycled, construction schedules

BASIC MATERIALS

aggregate, binder, cement, labor force, material availability, costs

Redefine Roles and Responsibilities

total asset manager1
TOTAL ASSET MANAGER

Applications Worldwide

  • UK, England Highway Agency
  • UK Cities
  • Denmark
  • France
innovative spirit
INNOVATIVE SPIRIT

“AASHTO member states must embrace new strategies that demand accountability and performance measurement.”

- Pete Rahn, MODOT; AASHTO October 2007

innovative spirit1
INNOVATIVE SPIRIT

“It’s more than just new technology. It’s more than a modulus. It’s using the creative energies of both the public and private sectors to deliver the best services possible to the traveling public. It’s about roles and responsibilities and risk sharing and partnering. It’s the future. And the future is now.”

- Ted Ferragut, March 2010

total asset manager2
TOTAL ASSET MANAGER

Next Steps ?

  • SHRP II Demonstration Project
  • AMOTIA Workshop
  • ACPA-MAC Assistance
  • Or just say ”Thank You, Ted. Our next speaker is..”
md concrete conference1
MD Concrete Conference

Concrete Pavement

Performance Contracting

“Managing the Asset”

Ted Ferragut, PE 3/22/10