1. HUMPPA Program Managed Performance Based Maintenance Contract Espoo Pilot Project 2014 – 2019 Katja Levola, Pirkanmaan ELY-Centre International Partnership Meeting 16.1.2014

2. Pirkanmaa ELY-Centre Presentation content Background information Program Managed Performance Based Maintenance Contract (PBMC) model HUMPPA - Pilot project Procurement & Tender evaluation procedure Contractors payment mechanism Additional potential incentives HUMPPA - Next steps 2 Katja Levola

3. Pirkanmaa ELY-Centre Finnish Transport Agency (FTA) January 2010 – merger of the Finnish Rail Administration, Finnish Road Administration and Finnish Maritime Administration into one organization known as the Finnish Transport Agency. Development of maintenance and traffic systems in cooperation with other operators. Promote productivity and innovations in the transport sector. Responsible for societys well-being, mobility of the transport systems network, environmental stewardship and the entire transport system as a whole. ELY - Centres transport responsibilities (9 regions) In 2010 - Partially composed from the nine Finnish Road Administration regional offices Responsible for the mobility of road transport and safety functions Responsible for maintenance, transport assets, systems, safety and mobility Responsible for the procurement of capital investment projects and all outsourced maintenance contracts. 3 Katja Levola

4. Pirkanmaa ELY-Centre Area Maintenance Contracts 81 contracts, 5 year duration All publicly tendered Quality Control (QC) by contractor Winter Maintenance: snow plowing, prevention of slippery conditions or deicing, repairing uneven surfaces, and ensuring the visibility of traffic control equipment Summer Maintenance; maintaining gravel roads, traffic signs, vegetation control, grass and brush cutting, repairing surface defects that cause risks to traffic safety In addition: continuous monitoring of the road system & other authoritative duties, like emergency response 4 Katja Levola Espoo Pilot Project

5. Pirkanmaa ELY-Centre Program Managed PBMC model Feasibility study during end of 2012. Applicable to very demanding type contracts, where there needs flexibility. Based upon principles and guidelines from the project management of maintenance contracts, alliance model, and traditional contracts. Model is termed Program Managed PBMC because the services significantly deviate from traditional projects & includes procurement in the name of the Program Managed PBMC. Using a target price concept. Committed this new model for a pilot project starting in the fall of 2013. 5 Katja Levola

6. Pirkanmaa ELY-Centre Clients goals Main goal is to provide services from a road users perspective and provide flexibility for the implementation of these services. Allow for variations during the contract period. Better subcontracting management. Promote innovation & development. Reasonable risk sharing and promote better teamwork/cooperation. This new model is expected to be straightforward and is aligned with present day contracts that have the potential to be adaptable. Management should be reasonable. Amount of inspections should be lower. 6 Katja Levola

7. Pirkanmaa ELY-Centre Structure of the Program Managed PBMC Includes many of the typical routine and periodic maintenance services, management and administration services and all related procurement duties. The contractor is responsible for the maintenance planning process that needs to be approved and continually modified in a cooperative effort. All purchases (product deliverables, performance, service requisitions and subcontracting) will be competitively tendered even alternative bids. All subcontracted maintenance activities and procurement are done in the name of the PBMC contractor. The client will nevertheless make final decision and approval. 7 Katja Levola

8. Pirkanmaa ELY-Centre HUMPPA - Pilot project Pilot project in Espoo area from 2014 – 2019. Mainly includes the roads in the cities of Espoo, Kauniainen, Kirkkonummi and outlined parts of Helsinki. The contract includes about 850 km of roads 150 km of pedestrian and bicycle pathways. Winter road classification 130 km of dual lane roads of class 1S About 200 km of single lane 1S, which includes ramps. The remaining road network is comprised of roads classified as II and III. The Espoo contract area is a highly travelled road network. Another challenge is the coastal area, because of changing weather. 8 Katja Levola

9. Pirkanmaa ELY-Centre Procurement process Contractor selection process is done in two phases. Prequalified bidders tenders were send a preliminary proposal in October 2013. Only the preliminary quality portion were submitted to the client-end of October. Next the client went through bilateral negotiations were intended to develop the invitation to tender documents, versus official contract negotiations. The second stage was to finalize the invitation to tender documents. Invitation to tender by the end of January 2014. The proposal due date is planned to be submitted by April 1, 2014. Wining tender is expected to be evaluated within one week. A signed contract is expected by the middle of May 2014. 9 Katja Levola

10. Pirkanmaa ELY-Centre 10 Katja Levola Tender evaluation procedure

11. Pirkanmaa ELY-Centre Tender evaluation procedure Using a competitive, negotiated method. Award is based upon most overall economically beneficial. Evaluation factors are 20% for quality, 10% of key personnel and 70% for the price portion. The quality assessment is evaluated from the submitted quality plans. The key personnel is composed of the service and organizational capabilities evaluation and by an examination. The target price is composed of all related procurement costs, management and administration, as well as the management service fee. 11 Katja Levola ++ = TARGET PRICE,

12. Pirkanmaa ELY-Centre Contractors payment mechanism The fixed management fee includes overhead costs, risks and profit margin. Contract management and administrative costs portion includes the contract management & administrative costs & office and information technology costs. The procurement costs include all related purchases, like all related sub- contracting, service contracts, and construction and maintenance services. 12 Katja Levola

13. Pirkanmaa ELY-Centre Additional potential incentives One existing incentive scheme & three new incentive potentials The first possible incentive is for the road user satisfaction and innovation, maximum of 2% of the target price. NEW INCENTIVES: Incentive for providing good maintenance services, maximum of 15000 per each contract year. Incentive for worker and road user safety, maximum of 15000 per each contract year. Incentive for safety accidents explained & evaluated, 20000 per each contract year. 13 Katja Levola

14. Pirkanmaa ELY-Centre HUMPA – next steps Request for tenders sent by January 1, 2014 Tender due date of April 1, 2014 Contract signed by Mid-May 2014 Contract start date of October 1, 2014 14 Katja Levola

15. Pirkanmaa ELY-Centre 15 Katja Levola Thank you! Katja Levola +358 400 277 812 katja.levola@ely-keskus.fi