Development of Performance Warranties for Performance-Based Road Maintenance Contracts

Abstract

Performance-based contracting in the transportation arena is a rather new concept which has a few applications in the United States. The Virginia Department of Transportation (VDOT) has been one of the first state agencies to take the initiative of using a performance-based contract for the maintenance of a portion of its interstate highway system. This initiative led to the establishment of a contract between VDOT and a private contractor in 1996. Just like performance-based contracting, the use of warranties in highway construction contracts in the United States is quite a new concept, which mainly dates back to 1995. There are different views possessed by different parties about the possible outcomes of implementing warranties in highway contacts. This research first explores the benefits that would/may be gained by the incorporation of warranty clauses into performance-based highway maintenance contracts, discusses the rationale behind developing warranty clauses for such contracts, and then develops a warranty clause template and proposes that it be used in the future performance-based road maintenance contracts issued by VDOT.