Performance Contracting 2008 WASHTO – CMS Meeting April 8, 2008

Overview What is Highways for LIFE? What is Performance Contracting? Why Performance Contracting for Construction? Why Performance Contracting for a Highways for LIFE Project Framework Purpose Stakeholder Involvement Framework Contents Lessons Learned Pilot Program Seeking the Best Solutions Workshops

What is Highways for LIFE (HfL)? HfL is a Federal Program driving the concept that we can build highways: Faster With less congestion With better safety and quality At lower cost, and With better user satisfaction

The Highways for LIFE Philosophy Set motorist-focused stretch goals Identify and use innovative practices and technologies to meet or exceed those goals Interact/communicate with customers

The Highways for LIFE Program Projects Technology Partnerships Technology Transfer Workshops Information Dissemination Monitoring and Evaluation Stakeholder Involvement

Oregons Highways for LIFE Project Replacing five bridges on Oregon 38 Goal is to minimize disruption to the traveling public Will use prefabricated bridge elements made with high-performance concrete Will move the prefabricated structures into place overnight with self-propelled modular transporters Anticipated total project cost is $47,554,000

What is Performance Contracting? Innovative contracting technique Contractor is responsible for achieving a defined set of goals Performance goals are specified instead of prescriptive methods

Why Performance Contracting for Construction? Allows State and local agencies to define and communicate to contractors specifically what they want to achieve Contractors will have the flexibility to determine how they do the work

Why Performance Contracting for a Highways for LIFE Project? Someone needs to be responsible for meeting the goals that are set for the project If the goals are under the influence of the contractor, why not make the contractor responsible for meeting them? Performance contracting provides a mechanism for assigning that responsibility to the contractor

Relation to the Highways for LIFE Program Performance contracting is a tool in the HfL toolbox HfL projects are not required to use performance contracting

Some Pros and Cons of Performance Contracting Pros Contractor is responsible for meeting the goals that they can influence Introduction of Innovation Defined Outcomes Contractor Flexibility Share of risk and rewards Cons New approach that requires a culture shift May not be applicable to all projects

Performance Contracting Framework - Purpose To provide State and local agencies with processes and materials that they can use to accelerate the development of a performance contract solicitation package for construction contracts Meant to be used as a reference guide Should help agencies to avoid common obstacles and pitfalls

Performance Stakeholder Involvement The project team developed the materials working with: A select group of stakeholders from State DOTs and Industry Provided guidance and review at the 30%, 60%, and 90% stages Subject matter experts from FHWA

State DOT and Industry Stakeholder Group Scott Jarvis - Caltrans Chuck Suszko - Caltrans Gene Mallette - Caltrans Peggy Chandler - Texas DOT Steve DeWitt - North Carolina DOT Kevin Dayton - Washington State DOT Dexter Newman - the Kentucky Cabinet Sid Scott - Trauner Consulting Brian Deery - AGC Bob Lanham - Williams Brothers Construction- Brian Burgett - Kokosing Construction Rich Juliano - ARTBA Note: Participation did not involve formal endorsement of the final product

Framework Contents Overall process for performance contract development Guidance on selecting appropriate projects Processes, lessons learned, and sample solicitation package materials for: Performance Goals Measurement Methodology Enhanced Low Bid Award Process Best Value Award Process SEP-14 Process

Pilot Program FHWA is currently seeking 4 to 8 agencies that are interested in piloting the Performance Contracting Framework. Pilot states will receive tailored technical assistance to help them implement this approach Pilot states can propose the use of the framework as an innovative approach when applying under the Highways for LIFE Program For more information on how an agency can become a pilot agency, talk to Mary Huie at or

Seeking the Best Solutions Workshops A one-day workshop for State DOTs Instructs participants how to use the HfL, ACTT workshop and performance contracting concepts to deliver a project better, faster and cheaper. Leads participants through the process of: identifying goals that respond to motorists, highway users and the agencys highest priorities and seeking the best ways to achieve those goals. For more information on hosting a workshop, contact Mary Huie at or

For More Information Mary Huie, FHWA Chris Schneider, FHWA Jim Sorenson, FHWA Mark Robinson, SAIC

Questions