Performance Contracting for Construction Framework for Implementation Mark

Performance Contracting for Construction: Framework for Implementation Mark Robinson, Ph. D. , P. Eng. , PMP SAIC 1/22/07

2 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

Why Performance Contracting for Construction? • Much of America’s transportation infrastructure is reaching the end of its design life and needs to be reconstructed • 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 3

4 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

5 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

6 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

State DOT and Industry Stakeholder Group • • Scott Jarvis - Caltrans Chuck Suszko - Caltrans Gene Mallette - Caltrans Peggy Chandler - Texas DOT • Steve De. Witt - 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 7

8 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

9 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

Relation to the Highways for LIFE (Hf. L) Program • Hf. L’s mission is to improve the driving experience of the American public • Hf. L is looking for new ways to build highways and bridges safer, faster, better, and less costly • Performance contracting will be a tool in the Hf. L toolbox • Hf. L projects are not required to use performance contracting • Additional consideration will be given to projects that propose to use performance contracting 10

11 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

12 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@dot. gov or 202 -366 -3039

13 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

14 For More Information • Jim Sorenson, FHWA james. sorenson@dot. gov, 202 -366 -1333 • Mary Huie, FHWA mary. huie@dot. gov, 202 -366 -3039 • Mark Robinson, SAIC mark. d. robinson@saic. com, 703 -676 -2384