1. 6 TH ANNUAL CONFERENCE

2. Footer Text Date PERFORMANCE-BASED MAINTENANCE APPROACH DB/P3 Edward P. Pensock, Jr. P.E. Strategic Project Division Director Texas Department of Transportation

3.  Does not include private financing  Not a prescriptive design  Innovation by the Developer  Review at project level as packages are released  Coordination with FHWA as needed  May include optional Capital Maintenance Agreement  Limited to 3 projects per fiscal year approved by Commission  Construction must be estimated at $50 million or more Design-Build vs. CDA Contracts 3  Similar to D-B, but may be done as: —Toll Concession —Design-Build Finance(f) —Design-Build-Operate-Maintain —Design-Build-Maintain —Design-Build  Use of independent engineer  More risk transfer than D-B  May include private financing  Limited to specific projects identified in Senate Bill 1730 CDADesign-Build 11

4. 4 Delivery Methods: Risk Allocation Assignments 1 Risk Type Project Delivery Method / CDA Business Model Design-BuildConcession Environmental Approval Owner Traffic & Revenue Financing Operation & Maintenance Environmental Compliance Shared ROW Acquisition 2 Utility Delays Design Developer Construction Schedule Delays 1 Actual risk assignments may vary by project 2 Eminent Domain delays retained by the owner TxDOT Business Programs

5. DB/P3 Maintenance Contracts  Developer responsible for design, construction, operations, maintenance and handback  Long term 15-25 years Mandatory O&M Period  5 to15 year O&M Performance Requirements may apply to a DB + CMA 5

6. Performance-Based Approach  Technical Provisions – TxDOT defines desired project outcome in the technical requirements – General Maintenance Obligations – Maintenance Management Plan (Reviewed and Approved by TxDOT) Performance requirements, Measurement procedures, Threshold values at which maintenance is required, Inspection procedures and frequencies, and Subsequent maintenance to address noted deficiencies, Impacts to Related Transportation Facilities 6 Compensation to TxDOT resulting from Maintenance Contractor’s failure to meet the performance requirements.

7. Maintenance Agreements  Comprehensive Maintenance Agreements and Capital Maintenance Agreements  Option for maintenance agreements if pricing acceptable  Achieves price certainty  Efficient for projects with unique features  Beneficial to achieving long-term ownership of design by the developer  Non-compliance handled through Non- compliance Points or Liquidated Damages 7 Non-Compliance Events D&C Work O&M Work Non-Compliance Points Payment Deductions Increased oversight if triggers are exceeded Warning notice of default if points accumulate and exceed threshold Liquidated Damages Unplanned lane closures Safety defect not repaired

8. O&M Agreements Examples 8 Concession (50 year term of contract): SH 130 Segments 5 & 6 North Tarrant Expressway Segments 1 & 2 I-635 LBJ Freeway Design/Build (three-5 year Capital Maintenance Agreements): SH 130 Segments 1 - 4 DFW Connector Dallas Dallas Horseshoe SH 99 (Grand Parkway) Segments F1, F2, and G IH 35E Managed Lanes Project Loop 1604 Western Extension

9. O&M Agreements Examples 9 Design-Build – Extended Comprehensive Maintenance Agreements (COMA) SH 183 Managed Lanes – 25 year maintenance responsibility (also includes five year extended construction financing) Loop 375 Border Highway West – 15 year maintenance responsibility

10. Questions? Edward P. Pensock, Jr., P.E. Strategic Projects Division Texas Department of Transportation Office: 512-936-0903 E-Mail: Ed.Pensock@txdot.govEd.Pensock@txdot.gov 10

11. 6 TH ANNUAL CONFERENCE

12. KEY CONSIDERATIONS IN TxDOT’S TOTAL MAINTENANCE SPECIFICATION John Roberts TxDOT Maintenance Division Performance-Based Contracts

13. KEY CONSIDERATIONS 13  Internal Input  Industry Input  Effect Measures of Performance

14.  Meeting with internal personnel to develop expectations of performance that are realistic/desired.  Evaluate input to provide consistency of expectations statewide. Goal = buy-in 14 INTERNAL INPUT

15. 15 INDUSTRY INPUT  Are our expectations realistic?  Bring good ideas for better execution.  Have we provided clear communication of expectations? Goal = decrease risk during execution

16. 16 EFFECT MEASURES OF PERFORMANCE  Condition Assessment  Key Performance Indicators (KPI)  Payment Reduction Strategy Goal = Perform. Get Paid Don’t Perform. Don’t Get Paid

17. 17 WHAT ARE THE RESULTS? Contractor Performance CategoryCriteria% (1) Quality Condition Assessment Element Score8 Condition Assessment Component Score Pavement & Bridges16 Traffic Operations8 Roadside8 Condition Assessment Overall Assessment10 Safety Safety Key Performance Indicators20 Timeliness Time Key Performance Indicators30 (1) % represents the potential percentage reduction in payment each month.100

18. 18 WHAT ARE THE RESULTS?  Failure to submit the initial Quality Management Plan within the first 60 days = 5% reduction in payment the 1 st month & then a 10 % reduction in payment thereafter.  Failure to submit the Safety Plan within the first 30 days = 5% percent reduction in payment in the 1 st month & a 10% reduction in payment each month thereafter.  Others

19. 19 EXAMPLE KPIs Safety KPI Traffic Control Perform Traffic Control Compliant with TMUTCD, TCP Standards, and BC Standards Implement compliant TCP. Implement noncompliant TCP corrective actions within 30 minutes of notification. Time KPI Asphaltic Pavement Surfaces Repair potholes and pavement failures. Temporary - within 1 hour rural and 2 hours urban and metro. Permanent - within 30 days.

20. 20 KPI PAYMENT METHODOLOGY # of Meeting Requirements/Total # of Occurrences = % Compliance Safety Time RangePayment RangePayment 100% +1% 95% +0.5% 95%> 90%0%100%> 90%0% 90%> 85%-2%90%> 85%-2% 85%> 80%-5%85%> 80%-5% 80%> 75%-10%80%> 75%-10% 75%> 70%-20%75%> 70%-20% 70%> 50%-30%

21. Questions 21 John A. Roberts, P.E. (512) 416-3083 John.Roberts@txdot.gov