COST SAVINGS FROM PERFORMANCE‐BASED MAINTENANCE CONTRACTING

Ad Straub

doi:10.3846/1648-715x.2009.13.205-217

Abstract

New procurement approaches combined with performance‐based building approaches should reduce costs, but empirical qualitative and quantitative studies are lacking. Performance‐based maintenance contracts give maintenance suppliers incentives to improve their way of working. Innovative, cost‐effective solutions that meet the performance criteria can be achieved, especially if the principle of whole‐life costing is being adopted. Indirect cost savings are expected as well. It enables maintenance contractors to assume responsibility for certain activities for which they are better equipped to perform than their clients. A calculation model was developed that calculates the net present value of the direct (product) and indirect (transaction) costs at project level for a competitive maintenance tendering approach and for performance‐based maintenance contracts. The findings show that performance‐based maintenance contracts reduce both direct and indirect costs compared to a competitive tendering approach. Essential preconditions are an early supplier involvement and longer term contracts, giving opportunities for maintenance product and maintenance process improvements. Santruka Nauji pirkimo būdai, derinami su subalansuotos statybos būdais, turetu mažinti išlaidas, tačiau trūksta empiriniu kokybiniu ir kiekybiniu tyrimu. Veiklos rezultatais pagristos priežiūros su tar tys skatina priežiūros paslaugas siūlančias bendroves tobulinti savo darbo būdus. Galimi no vatoriški, taupūs sprendimai, tenkinantys rezultatyvios veiklos kriterijus, ypač taikant viso naudojimo laiko išlaidu (angl. whole‐life costing) principa. Tikimasi sumažinti ir netiesiogines išlaidas. Priežiūra atliekantiems rangovams tai leidžia prisiimti atsakomybe už tam tikra veikla, kuriai vykdyti jie turi daugiau priemoniu nei ju klientai. Sukurtas skaičiavimo mo de lis, kuri taikant apskaičiuojama viso projekto tiesioginiu (produktas) ir netiesioginiu (sandoris) sa nau du dabartine grynoji verte (NPV), kai vykdomas priežiūros darbu pirkimo konkursas ir kai sudaromos veiklos rezultatais pagristos priežiūros sutartys. Rezultatai rodo, kad, lyginant su pirkimo konkursais, veiklos rezultatais pagristos priežiūros sutartys mažina ir tiesiogines, ir netiesiogines išlaidas. Būtinos salygos ‐ itraukti i priežiūros vykdyma tiekeja ankstyvuosiuose etapuose ir sutartis sudaryti ilgesniam terminui, suteikiant galimybiu tobulinti produkta ir priežiūros procesa.

Highlights

During the 1990s Dutch housing associations were transformed into so-called hybrid organisations, “combining task organization and market organization” (Priemus, 2001: 247)
From the results the overall project costs appear to be lower for performance-based partnering than for competitive maintenance tendering
The findings show that long term performance-based contracts have potential for production cost improvements, but there are some practical barriers to implement the principles of whole-life costing by contractors

Summary

Introduction

During the 1990s Dutch housing associations were transformed into so-called hybrid organisations, “combining task organization (implementing public tasks) and market organization (meeting market demands)” (Priemus, 2001: 247). Both their market and task operations forced housing associations to adopt a more structured approach to measuring and monitoring their performance. The drive towards more professional standards led to the adaptation of private sector approaches to public housing management (Nieboer and Gruis, 2004). The professionalism of Dutch housing associations has led to paying more attention to maintenance processes and partnerships in the supply chain of maintenance, leading to performance-based maintenance contracts too. The housing associations are permitted to use long term performance-based contracts, because European legislation for public tendering is not mandatory for them

Methods

Results

Conclusion