Road Maintenance Contracts Research Articles

Struggling with strategizing in public client organisations: Managing strategic projects in inter-organisational contexts

The efficiency of using strategic projects to accelerate long-term change is questioned, especially in inter-organisational contexts. Strategic projects operationalised in inter-organisational contexts are decoupled from the parent – permanent – organisation, creating a need for project actors to manage in-between. The aim of this paper is to increase the understanding of practices for managing strategic projects in inter-organisational contexts, initiated by public client organisations. Applying a practice perspective, this paper presents a case study exploring a strategic project to test collaborative contracting in road maintenance contracts for a public infrastructure client in Sweden. The findings revealed a lack of structure regarding both participation and responsibilities, as well as uncertainties and ambiguities with respect to the goal of the strategic change. The study shows how strategic practices move from central units at the permanent organisational level to the contract level where the strategic project is operationalised and tested, isolating the project and making project actors act as middle managers in-between the project and parent organisation. Thus, the study contributes with a discussion on the efficiency of strategizing through projects in public organisations, especially those operating in a network of suppliers through outsourcing.

Construction of a simulation model for substantiating the parameters of long-term road maintenance contracts

This paper reports a study into the main parameters of long-term contracts for the maintenance of roads. Weaknesses in existing methods and models of substantiation of the initial characteristics of contracts have been identified. It is established that the main reason for the transition to long-term contacts in the road sector is the need to improve the efficiency and effectiveness of road asset management. This determines the main goal to maintain the operational condition of all components of roads at a level that ensures the satisfaction of user requirements and contributes to the preservation of assets. A simulation model for substantiating the parameters of long-term contracts for road maintenance has been built, which makes it possible to simulate forecast assessments of the characteristics of contracts. Underlying this study is the Monte Carlo method, as well as the triangular law of distribution, models of deterioration and restoration of the condition of road elements. Taking into consideration these models, it was established that the error in justifying the parameters of long-term contracts according to the devised method is up to 10 %. The devised model was tested by applying the developed original LTCsimula program using an example of the section of a motorway with a length of 87.3 km with an average level of requirements. According to the results of the test, the assessment of the laws of distribution of value, as well as the amount of deductions and profits of a long-term contract, was carried out. The calculation results demonstrated the model’s capability to determine the strategies for the maintenance of roads, taking into consideration the risk of implementing a contract with an error of up to 3.9 %. The practical use of the devised simulation model makes it possible to improve the efficiency of operational maintenance of roads, as well as to save from 10 % to 40 % of the cost of road maintenance

Comparison Of Winter Maintenance Requirements (Estonia, Latvia, Lithuania)

Three Baltic states are located next to each other on the coast of the Baltic Sea. Similarly, to Finland, density of population in these countries is low. All three countries have large amount of state roads with low traffic intensity.Climatic differences are minimal. Milder climate is in coastal area but inland the weather conditions are more severe. The average air temperature in January in Estonia is from -2 to -7 degrees Celsius but in Lithuania from -1 to -5 degrees Celsius. The number of snowy days fluctuates from 50 to 120.All three countries have common contracts for summer and winter maintenance where the responsibility for maintenance activities lays on the contractors. Despite common history the methods of the assignment of road maintenance contracts are different in every country. Estonia awards contracts in open tenders and has performance-based contracts. Latvia has the contract awarded to the State Joint Stock Company «Latvijas autoceļu uzturētājs» (“Latvian Road Maintainer”) by law and the contract is unit price based. Lithuania has the contract awarded to the state-owned company « Kelių priežiūra» the contract is performance-based.The requirements for road conditions are quite similar in all three countries. They have three levels of maintenance.High service level means snow and ice-free surface of the road pavement during winter in constant weather conditions and quick response in case of worsening road conditions.Medium service level means that snow and ice is allowed on the surface, but activities must be undertaken to improve skid resistance. The lowest service level means that snow and ice is allowed on the surface and activities to improve skid resistance (mostly only snow cleaning) may be undertaken in some spots only.In Estonia the expenses for winter maintenance are lower than in the neighbouring countries but it does not have impact on traffic safety during winter.

IMPROVING ROAD MAINTENANCE MANAGEMENT PRACTICES IN RUSSIA

The level of transport infrastructure development is one of the key determinants of economic growth. In 2018, 67.1% of all transported goods in Russia were delivered via road transport. However, Russia’s motor transport system has yet to come close to fulfilling its full potential – 57.6% of public roads do not meet regulatory maintenance requirements. The prevailing statistics highlights the task of ensuring the safety of roads. This issue is especially relevant during winter months, when the roads experience maximum climatic and physico-chemical effects. This article analyzes the road safety system of the constituent entities of the Russian Federation, considers the main regulatory documents governing the activities of road work suppliers and executive authorities in the field of road maintenance. The authors analyzed the best foreign practices in road maintenance policy. The main result of the study is the proposal to introduce a mechanism for servicing roads using a performance based contract to replace to cost based road maintenance contracts, which are the most widely applied in Russia.

Нормативне забезпечення запровадження довгострокових контрактів на експлуатаційне утримання автомобільних доріг для забезпечення їх експлуатаційного стану

Introduction. The research level of the implementation of long-term contracts for road maintenance has increased significantly over the past few years. Over the last year several basic regulatory framework have been developed and approved, which allow to start the practical implementation of such contracts. The issue of determining the cost of long-term contracts for road maintenance to ensure their operational condition will be disclosed by the authors. Problem Statement. One of the main problems that preceded the work on research and development of methodological support was and still is the low quality of the operational condition of roads in Ukraine. According to the Global Economic Forum experts, who assess the quality of roads in 141 countries, in 2019 Ukraine took 119th place with a score of 3.0 out of 7 possible [1]. An important factor is the tendency to a certain degree of neglect of operational maintenance in favor of larger investment projects (reconstruction, repairing and even construction). Irregular and improper maintenance of roads significantly increases the cost of subsequent reconstruction or overhaul. Purpose. The purpose of the article is to highlight the basic theoretical principles and justification of the developed mechanism for determining the cost of long-term contracts for road maintenance and related regulations that ensure its implementation. Materials and methods. When writing the article the theoretical method of scientific research was used. The method of analysis was used in terms of the developed regulatory framework to determine the cost of long-term contracts for road maintenance. Results. In this article the current exploratory works in the development of regulatory framework for the functioning of long-term contracts for road maintenance to ensure their operational condition were analyzed. The result of the work is the disclosure of the mechanism for determining the cost performance-based road maintenance contracts and in particular all the documents on which it is based. Conclusions. The results of the analysis allow us to conclude that local developments that aim to implement the long-term contracts for road maintenance to ensure its’ operational status have reached a level where they can be actively used to upgrade road maintenance. The in-depth analysis of the effectiveness of such contracts and the nature of methodological recommendations disclosed in the article convinces of sufficient regulatory support for this type of contracts under consideration and determines further steps for the development of this direction.

Competitive tendering, ownership and cost efficiency in road maintenance services in Sweden: A panel data analysis

Abstract This paper uses econometric methods to study the cost efficiency of road maintenance provision in Sweden for the first time. The novelty lies in the application of econometric techniques to a new and rich panel dataset (73 contracts; 11 years, 2004–2014) with a wide range of variables and approaches to controlling for heterogeneity (including weather variation). The analysis is applied in the context of a sector where all road maintenance contracts are subject to competitive tendering, but with a state-run provider competing against private firms. The key focus is whether, even after competitive tendering, efficiency differences remain between the state provider and private entrants. We find that the state-run provider has significantly higher costs (between 8 and 20%) than private firms despite holding 60% of the market. The results suggest that substantial savings are possible through opening up road maintenance to the private sector through competition for the market; but that in Sweden, the tendering process is still not working optimally. Further research is needed to understand why the current cost gap persists between public and private providers, despite competitive tendering having been present across the whole market for several years.

Proposition of a Model for Selection of the Hybrid Contract Implementation Strategy for a Pilot Project of Regular Road Maintenance in Montenegro

Performance‐based maintenance contracts (PBMCs) are modern contracts that should allow road maintenance entities to contract maintenance activities more successfully and generate money value. In the case of Montenegro, a gradual approach of PBMC introduction is recommended through a hybrid contract for routine road maintenance. Hybrid contract implementation will enable a lower level of client risk in the early stages of PBM contract. Game theory is used for selection of an adequate model for hybrid contract structure in terms of size and nature of the BoQ elements. In addition to the estimated or charged quantities of works from previous contracts, the model also includes parameters that to some extent take into account the experience and expertise of contractors and clients, but also the availability of road data. In order for model to be applied, historical data from traditional road maintenance contracts, which were implemented in the previous period in Montenegro, are used.

Determining duration of performance-based contracts based on fair payoff for the government and contractors

Conventional contracts are one of the road maintenance contracts based on the number of jobs measured and paid at an agreed level for different work items or referred to as unit price contracts. Meanwhile, performance-based road maintenance determines the minimum conditions of roads, bridges, and traffic assets that must be fulfilled by contractors. National road maintenance in several developed countries has successfully used integrated contracts, performance-based contracts. This is followed by the developing countries that previously had problems with the quality of national roads in which they were unable to provide the desired level of service. This performance contract prioritizes products and it is up to the contractor how to achieve this. Therefore, the choice of design, application of technology, innovation, process, and management are all determined by the contractors. This allocates higher risks to contractors compared to traditional contracts. But at the same time, it opens opportunities to increase margins where increasing the efficiency and effectiveness of design, process, technology, and management can reduce costs to achieve established standard performance. This study uses simulations to obtain the duration of fair and optimal contracts for the government and contractor. Duration 5-7 years is determined a duration that can provide benefits for both parties.

Change Orders on Road Maintenance Contracts: Causes and Preventive Measures

AbstractA Delphi study was conducted with maintenance engineers of state DOTs in the United States to identify the causes and preventive measures of change orders (COs) in road maintenance projects...

Premises for an optimal model of managing the burden of financial losses stemming from damage to road infrastructure

The empirical analysis of the distribution of risk related to the repair or replacement of road safety devices in existing performance-based maintenance contracts and the analysis of claims adjustment procedures indicate a certain imbalance in risk distribution between the road administrator and the entrepreneurs who have concluded road maintenance contracts, in particular performance based contracts. Relevant legal rules allow for a different, fairer distribution of the risk of suffering repair costs in certain damage scenarios. Insurance policy with a wide coverage of both property and liability risks appears as an optimal way of managing risks of losses to road infrastructure. Both contracting parties have an interest in obtaining first party insurance in the discussed field, although in practice it can be economical only to the General Directorate for National Roads and Motorways (GDDKiA). The law provides parties who suffered loss with a direct action against a traffic liability insurer of the wrongdoer who caused the damage.

Optimal Maintenance and Rehabilitation Policies for Performance-Based Road Maintenance Contracts

AbstractPerformance-based road maintenance contracts (PBRMCs) are an effective mechanism to transfer risk and responsibility of road maintenance activities to the private sector. Proper structuring of performance indicators and the extent of penalties and incentives in the contract has a significant effect on the overall cost and level of service (LOS) provided to the public. This research develops a series of mathematical optimization models and a computational tool that allows road agencies and contractors to better structure the following contractual conditions in a performance-based contract (PBC) for road maintenance: (1) types of performance indicators to be considered; (2) their threshold levels; and (3) the appropriate levels of penalties and incentives. The availability of such models and tools will allow road agencies and contractors that are unfamiliar with PBRMCs to make informed decisions on their approach to contractual risk allocation. A case study of a major highway in Egypt is presented t...

Impact of Performance Based Contract Implementation on National Road Maintenance Project to Road Functional Performance

The national road network has a significant role in promoting the national economy in Indonesia. But the national road network conditions in general are still not satisfactory although the government continues to improve the technical standards of road maintenance which contributes to the high unit cost of road maintenance. To overcome this classical problem, now the road agencies began to implement alternative road maintenance contracts known as Performance Based Contract (PBC). Successful practice of PBC implementation in various countries indicates that the PBC is able to produce a good road service performance compared with the implementation of in-house system or contract-based input on road maintenance projects. This study aims to measure the impact of PBC implementation on the national road maintenance project in Indonesia with the type of flexible pavement. The impact of PBC is focused on the functional performance, which is measured using a model of IIRMS and expressed in the International Roughness Index (IRI) value. The case study conducted on one of the PBC pilot projects that are in the segment of northern coast of West Java. The results showed that the implementation of PBC for national road maintenance projects proven to ensure the quality and road service performance for the long term.

A Contingency Cost Estimation System for Road Maintenance Contracts

Generally, a contingency cost is provided in a project to cover the change orders (CO) that may be generated in a project during the construction phase due to various reasons, such as unforeseen conditions, design errors, and scope changes. If the contingency cost could be accurately estimated during the contract's procurement phase, the CO cost could be properly managed during the construction phase. Traditionally, contingency costs are allocated around 10% to 15% of the project cost without considering any of the historical CO costs. In this study, a tool was developed to estimate the contingency cost of a road maintenance contract by using a mathematical model. The tool forecasts the contingency costs for each of the road maintenance activities included in the contract by using an artificial neural network model based on the historical CO data. The tool was validated using the CO cost data available from road maintenance contracts.

Implementation of Level-of-Service Component for Performance-Based Road Maintenance Contracts

In the performance-based road maintenance setting, the contractor is given the responsibility and flexibility to maintain the roadway system's assets using innovative approaches. Increased control of the contractor and innovative techniques implemented by the contractor should yield a product with a predefined quality. This can be ensured by implementing a systematic performance measurement system composed of performance criteria, performance targets, and protocols for taking the measurements necessary to determine whether the contractor meets such criteria and targets. This performance measurement system should produce appropriate and user-friendly reports that can effectively communicate the results to stakeholders, such as the transportation agency, the contractor, and the traveling public. The Virginia Department of Transportation (VDOT) has been using a systematic and comprehensive framework to measure the performance of its performance-based road maintenance contractors and to communicate the results effectively to stakeholders. The steps for implementation of the level-of-service effectiveness component of such a framework are presented to illustrate to transportation agencies how the framework works. Although the framework was developed and implemented for VDOT, it can be adopted by any other transportation agency and adapted to meet that agency's own needs.

Sampling Procedure for Performance-Based Road Maintenance Evaluations

Maintaining the road infrastructure at a high level of condition with generally limited amounts of available funding is a challenge for many transportation agencies. To address this challenge, many road administrators worldwide have implemented performance-based maintenance contracts. In performance-based maintenance contracts, road administrators define performance measures (e.g., performance-based specifications) that specify the minimum condition at which the asset items are to be maintained. To ensure that contractors maintain the asset items according to these measures, road administrators must design and implement a comprehensive and reliable performance monitoring process. One of the most important areas within the performance monitoring process is inspection conducted in the field. Defining a procedure that guarantees the success of field inspections is a challenge. When defining such a procedure, road administrators must consider budget and time limitations, among others. Since performance-based road maintenance contracts are relatively new, the availability of guidelines for such issues (with focus on performance-based contracts) is limited. That need is addressed by presentation of a three-stage and seven-step statistical sampling procedure developed to ensure that findings from field inspections will be reliable and representative with high confidence of the actual condition of asset items in the entire population. Also presented are three alternative approaches for sampling for the cases in which sampling needs to be performed not just once but multiple times over the duration of a performance-based road maintenance contract.

The application of environmental requirements in Swedish road maintenance contracts

This paper reports two studies of the implementation of environmental requirements in Swedish road maintenance contracts. It aims to examine the fulfillment and follow-up of the requirements, the client intentions behind the requirements, and factors influencing the contractors' environmental performance. The study shows that a serious effort to integrate environmental aspects into the contracts has been made. However, the application of the requirements is hampered by deficient information transfer to key actors and a lack of systematic follow-up of the requirements. In order to make green procurement effective, simpler and clearer requirements and effective follow-up routines are needed.

The introduction of environmental requirements for trucks and construction vehicles used in road maintenance contracts in Sweden

This paper examines the development and implementation of environmental requirements for trucks and construction vehicles in Swedish road maintenance contracts. The process in which the road admini ...

Evaluation of a mechanism for urban road maintenance by level of service

The agency responsible for constructing and maintaining urban roads in Chile has initiated a pilot programme under which responsibility for the maintenance and preservation of urban roads falls within the scope of the private sector, which assumes the commitment to maintain roads in an adequate condition in exchange for a pre-established payment, called urban road maintenance by level of service. The purpose of the research described in this paper was to evaluate the implementation of contracts by level of service. This evaluation was based on comparing total costs (direct and indirect) with the traditional method, considering the savings in operating costs and the impact on users as well as the benefits. Statistical information was considered relating to types of structure, types of road, travel demand, level of road distress, threshold of intervention, construction, maintenance and operating costs, and impacts. Based on the results obtained, it is concluded that it is feasible to apply urban road maintenance contracts by level of service at both a technical and an economic level, and that such contracts should be applied for specific types of road, pavement conditions and types, and contract periods.

Evaluation of a mechanism for urban road maintenance by level of service

The agency responsible for constructing and maintaining urban roads in Chile has initiated a pilot programme under which responsibility for the maintenance and preservation of urban roads falls within the scope of the private sector, which assumes the commitment to maintain roads in an adequate condition in exchange for a pre-established payment, called urban road maintenance by level of service. The purpose of the research described in this paper was to evaluate the implementation of contracts by level of service. This evaluation was based on comparing total costs (direct and indirect) with the traditional method, considering the savings in operating costs and the impact on users as well as the benefits. Statistical information was considered relating to types of structure, types of road, travel demand, level of road distress, threshold of intervention, construction, maintenance and operating costs, and impacts. Based on the results obtained, it is concluded that it is feasible to apply urban road maintenance contracts by level of service at both a technical and an economic level, and that such contracts should be applied for specific types of road, pavement conditions and types, and contract periods.