# Presentation: 324690

## Performance ContractingA State Agency Perspective

**Performance Contracting****A State Agency Perspective**

**Steven DeWitt, PE **
**Chief Engineer **
**North Carolina Turnpike Authority**

## ?

**?**

## Agenda

**Agenda**

**Is There a Problem?**
**Contracting Industry?**
**Why Performance Contracting?**
**Benefits**
**National Activities**
**Challenges**

## Is There A Problem?

**Is There A Problem?**

**We Need...**
**Quality**
**Safety**
**Environmental Responsibility**
**Reasonable Cost**
**Schedule Certainty**

***Reality Doesn’t Always Meet Expectations...***

## Is There A Problem?

**Is There A Problem?**

**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...**
** **

## Project Development & Implementation

**Bridge**** ****To**
**New Island**

**I am sure this**
** ****will work!**

**Bridge To**
** **
**Nowhere**

**Bridge To**
**No Wheland**

**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 %$#’en**
**piece of *&^% **
**for me **
**to live with!**

**Project Development & Implementation**

**Typical “Silo” Approach**

## How About the Contracting Industry?

**How About the Contracting Industry?**

**Low Bid...**
**Bid the Contract**
**Get the Project**
**Build the Project**
**Move on...**
** **_***What About Long Term Performance?***_
** **

**Low Bid Contract for Project 345657**
**The New Island to Nowhere Connector**

**New **
**Island**

**Nowhere**

##   Rely on State Agency Specifications, Means & Methods, Inspection...

**  ****Rely on State Agency Specifications, Means & Methods, Inspection...**

**How About the Contracting Industry?**

##    Can We Transition?

**   ****Can We Transition?**

## Why Performance Contracting?

**Why Performance Contracting?**

**Design-Build?**
**Alternative Contracting?**
**Claims?**
**Added Work?**
**Public, Legislative, Etc. Pressures**

***A Changing Transportation World...***

## The New Island – Nowhere Connector

**Project Scope**

**The New Island – Nowhere Connector**

**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**

## Benefits

**Benefits**

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

## Benefits

**Benefits**

_**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**

## 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 – Yes**

**Knowledge Gained Through Staying Engaged...**

## Existing Examples of Performance Specifications/Contracting

**Existing Examples of Performance Specifications/Contracting**

**A + B Contracts**
**M & W Warranties**
**Traffic Control Specifications **
**Maintenance Contracts**
**Many Other Examples... **

## National Activities

**National Activities**

**Performance Specifications WG**
**Highways For Life**
**SHRP II**
**Construction Management ETG**
**Other “Stuff”**
** **

## Challenges

**Challenges**

**Cultural Issues**
**Cost?**
**Performance Measures**
**Contract Issues**

## Challenges

**Challenges**

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

## Risk

**Risk**

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

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

## Bottom Line...

**Bottom Line...**

**What Will it Cost?**
**Will It Produce the Results?**
**Can We Overcome the Cultural Hurdles?**

**Make The Business Case...**