2007 Transportation Research Board Performance Contracting A State Agency Perspective Steven DeWitt, PE Chief Engineer North Carolina Turnpike Authority

2007 Transportation Research Board

Performance ContractingPerformance ContractingA State Agency PerspectiveA State Agency Perspective

Steven DeWitt, PE Steven DeWitt, PE

Chief Engineer Chief Engineer

North Carolina Turnpike AuthorityNorth Carolina Turnpike Authority


?


AgendaAgenda

• Is There a Problem?Is There a Problem?• Contracting Industry?Contracting Industry?• Why Performance Why Performance

Contracting?Contracting?• BenefitsBenefits• National ActivitiesNational Activities• ChallengesChallenges


Is There A Problem?Is There A Problem?We Need…We Need…

• QualityQuality• SafetySafety• Environmental ResponsibilityEnvironmental Responsibility• Reasonable CostReasonable Cost• Schedule CertaintySchedule Certainty

Reality Doesn’t Always Meet Reality Doesn’t Always Meet Expectations…Expectations…


Is There A Problem?Is There A Problem?

State Agencies Don’t Always Have the Best Solution to Get State Agencies Don’t Always Have the Best Solution to Get ThereThere……

We Do Have Expertise in:We Do Have Expertise in:• PlanningPlanning• DesignDesign• Contract Administration vs Construction?Contract Administration vs Construction?• MaintenanceMaintenance

We Do Not Always Pull Them Together Well…We Do Not Always Pull Them Together Well…

–


Bridge To

New Island

I am sure this

will work!

Bridge To

Nowhere

Bridge To

No Whelan

d

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 can’t believe they left

this %$#’enpiece of *&^%

for me to live with!

Planning DesignConstructi

on

Operations

Project Development & Implementation

Typical “Silo” Approach

COLA

CO

LA


How About the Contracting How About the Contracting Industry?Industry?

Low Bid…Low Bid…

• Bid the ContractBid the Contract• Get the ProjectGet the Project• Build the ProjectBuild the Project• Move on…Move on…

What About Long Term Performance?What About Long Term Performance?

–

Low Bid Contract for

Project 345657

The New Island to Nowhere Connector

New Island

Nowhere


Rely on State Rely on State Agency Agency Specifications, Specifications, Means & Methods, Means & Methods, Inspection…Inspection…

Where is that

DOT guy to tell

me I am

doing this right?

How About the Contracting How About the Contracting Industry?Industry?

Quality Control?Quality Control?

Quality Assurance?Quality Assurance?

Who, Where, What…Who, Where, What…


Means & Methods

Performance Specifications

Long Term Project Wide Warranties

Can We Transition?


Why Performance Contracting?

• Design-Build?

• Alternative Contracting?

• Claims?

• Added Work?

• Public, Legislative, Etc. Pressures

A Changing Transportation World…


Project Scope

The New Island – Nowhere Connector

New Island

Nowhere

CL CL

Typical Section Station 132+00 to 256+32 –l-

AASHTO Design Guide

Specifications

Utility Manual

Noise Policy

NEPA Process

Asphalt Designs

Roadway Design Guide

Construction Manual

404 Conditions

401 Conditions

Parcel #35 Commitment

Parcel #46 Commitment

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


BenefitsBenefits• InnovationInnovation• Fewer Constraints - Planning & ExecutionFewer Constraints - Planning & Execution• Streamlined Agency Project Development?Streamlined Agency Project Development?• Cost Savings?Cost Savings?

– Less Inspection?Less Inspection?– Less Testing?Less Testing?– Freedom = Better Prices?Freedom = Better Prices?

• Risk ApportionmentRisk Apportionment• Life-Cycle ConsiderationsLife-Cycle Considerations

–


BenefitsBenefits

More Industry InvolvementMore Industry Involvement

• Value EngineeringValue Engineering• ConstructabilityConstructability• Clarity for Bidding?Clarity for Bidding?• Contractor View of “Engineering Contractor View of “Engineering

Economy”Economy” Eliminate “Best Guess” EngineeringEliminate “Best Guess” Engineering Efficiency in Execution Efficiency in Execution

• Contractors Will Get BetterContractors Will Get Better


Contractors Will Get Better?Contractors Will Get Better?Home Builders – Specifications, Plans, Details…

• Inspection?

• Means & Methods?

Transportation Contractors – Specifications, Plans, Details…

• Inspection – Yes

• Means & Methods – YesKnowledge Gained Through Staying Engaged…


Existing Examples of Existing Examples of Performance Performance

Specifications/ContractingSpecifications/Contracting

• A + B ContractsA + B Contracts• M & W WarrantiesM & W Warranties• Traffic Control Specifications Traffic Control Specifications • Maintenance ContractsMaintenance Contracts• Many Other Examples… Many Other Examples…


National ActivitiesNational Activities

• Performance Specifications WGPerformance Specifications WG• Highways For LifeHighways For Life• SHRP IISHRP II• Construction Management ETGConstruction Management ETG• Other “Stuff”Other “Stuff”

–


ChallengesChallenges

• Cultural IssuesCultural Issues

• Cost?Cost?

• Performance MeasuresPerformance Measures

• Contract IssuesContract Issues

OUCH!

Rats!

AAARRRGGG!

That Son-of - a- &̂ %$!What’s wrong with the old way?!?!

%$#@*!!!

NOOOOOO!

OUCH!

Rats!

AAARRRGGG!

That Son-of - a- &̂ %$!What’s wrong with the old way?!?!

%$#@*!!!

NOOOOOO!


ChallengesChallenges

• Scope ClarityScope Clarity

– ““You Will Get What You Tell You Will Get What You Tell Them You Want”Them You Want”

– Needs Versus WantsNeeds Versus Wants

• Risk!Risk!

• Making the Business CaseMaking the Business Case


RiskRisk

DOT Gets “Stuck” With the DOT Gets “Stuck” With the Product & Must Maintain it…Product & Must Maintain it…

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


Bottom Line…Bottom Line…

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

Cultural Hurdles?Cultural Hurdles?

Make The Business Case…

Documents

2007 Transportation Research Board Performance Contracting A State Agency Perspective Steven DeWitt, PE Chief Engineer North Carolina Turnpike Authority