1. Safe roads, Reliable journeys, Informed travellers REGIONAL WORKSHOP ON PPP IN TRANSPORT RIGA, LATVIA – 6 to 8 MARCH 2007 MEASUREMENT OF PERFORMANCE IN CONSTRUCTION CONTRACTS THE UK EXPERIENCE by ALEC BRIGGS, SENIOR PROJECT LEADER, HIGHWAYS AGENCY and BARRY DREWETT, TECHNICAL DIRECTOR, PELL FRISCHMANN CONSULTANTS LIMITED

2. Safe roads, Reliable journeys, Informed travellers OUTLINE OF PRESENTATION Part 1 - Alec Briggs Performance Measurement Generally A Toolkit for Performance Management Performance Indicators for the preparation and delivery of Major Projects The Scoring of Performance Part 2 - Barry Drewett Performance Measurement – PPP/DBFO Contracts DBFO Cos 5-Year Management Plan / Performance Indicators Core Service Delivery Requirements Quality Management Monitoring and Auditing (including Remedy) Product Service Right First Time CostTime Safety Product Servic e SafetyRight First Time SafetyRight First TimeTime Cost

3. Safe roads, Reliable journeys, Informed travellers The Highways Agency has recently developed a new Performance Measurement Toolkit for Major Schemes The Toolkit will be used for all new major schemes. Integrated Project Team members will need to be familiar with its application Motivating Success A Toolkit for Performance Measurement -Major Projects- Issued 2006 Version 1.02 PMP A TOOLKIT FOR PERFORMANCE MANAGEMENT

4. Safe roads, Reliable journeys, Informed travellers It is believed that the Toolkit will help the Agency realise its business objectives Continued performance improvement Long-term relationship with Suppliers Benchmarking Performance Identification of Best Practice Learning Lessons Scheme Objectives Customer Service Best Value

5. Safe roads, Reliable journeys, Informed travellers Areas of Measure The Areas of Measure are closely aligned with the Highways Agencys business objectives and provide a scorecard of Integrated Project Team performance Team Culture Client Per- formance Product Service Right First Time Cost Time Safety

6. Safe roads, Reliable journeys, Informed travellers Performance evidence is used to reduce the subjectivity in Performance Indicator scoring, and the likelihood of scoring disagreements between Supplier and Client Performance of the Integrated Project Team Hard Quantitative Measures, e.g. Change in Scheme Cost Predictability of Cost Predictability of Time Accident Frequency Rate Soft Qualitative Measures, e.g. Delivery to Project Brief Organization & Management Management & Improvement of (Client, Customer, Third Party Relations) Evidence Supporting Performance

7. Safe roads, Reliable journeys, Informed travellers Most Highways Agency Major Schemes consist of three separate phases: Phase 1A, Phase 1B and Phase 2 The Toolkit accommodates the changing nature of a major scheme from start to finish. In special circumstances given Performance Indicators can be partially or totally excluded from the measurement process Phase 1A (Orders Prep) Phase 1B (Statutory Processes) Phase 2 (Design & Construction) Major Scheme Lifecycle

8. Safe roads, Reliable journeys, Informed travellers TYPICAL PERFORMANCE INDICATORS Each Area of Measure consists of a number of Performance Indicators The Performance Indicators have been selected to reflect the Highways Agencys performance expectations of its Suppliers Product Delivery to Project Brief Highway Design Structures Environmental Assessment Traffic & Economic Assessment Draft Orders & Statutory Processes Risk Register and Opportunities Plan Service Organisation & Management Procurement of Specialists & Suppliers Supply Chain Management & Improvement of Client Relations Management & Improvement of Customer & 3 rd Party Relations Innovation & Value for Money Management of Change Right First Time Quality Management System Cost Reliability of Estimating & Forecasting Change in Scheme Cost Predictability of Cost Time Change from Accepted Programme Reliability of Programming Predictability of Time Safety Health, Welfare & Workforce Development Compliance with CDM Regulations Safety of the Public Accident Frequency Rate

9. Safe roads, Reliable journeys, Informed travellers SCORING OF PERFORMANCE (based on Client Satisfaction Levels) Scoring Performance Indicators requires the Integrated Project Team to have aligned understanding of what the Client expects Interpretation & Notes >5 Client satisfied <5 Client dissatisfied =5 neutral performance, i.e. the Client is neither satisfied nor dissatisfied =10 indicates total client satisfaction = 0 indicates total client dissatisfaction A score of 6 is regarded as indicating good overall performance No intermediate scoring is permissible (scores of 1, 3, 7 and 9 cannot be awarded) Satisfaction levelDissatisfaction level 01024568 Score Level of client satisfaction Totally dissatisfied Very dissatisfied Slightly dissatisfied Neither satisfied nor dissatisfied Just Satisfied Highly satisfied Totally satisfied

10. Safe roads, Reliable journeys, Informed travellers Measuring performance provides the information required to drive continuous improvement of the Supplier and the Highways Agency Performance management is the responsibility of the Project Leader. It is expected that the Integrated Project Team will fully support Performance Management interventions in order to realise benefits. Radar diagrams can be used to present all Areas of Measure scores for a given measurement period. Areas of poor and excellent service can readily be identified. Line graphs or histograms can be used to identify trends in performance for Area of Measure or Performance Indicator level. Product Service Right First Time Cost Time Safety Product Service SafetyRight First Time SafetyRight First TimeTime Cost

11. Safe roads, Reliable journeys, Informed travellers In Summary: By making performance measurement an integral part of a major scheme, the required outcomes will be realised to the mutual benefit of both Supplier and Client

12. Safe roads, Reliable journeys, Informed travellers Part 2 - Barry Drewett Performance Measurement – PPP/DBFO Contracts DBFO Cos 5-Year Management Plan / Performance Indicators Core Service Delivery Requirements Quality Management Monitoring and Auditing (including Remedy)

13. Safe roads, Reliable journeys, Informed travellers DBFO Cos 5-YEAR MANAGEMENT PLAN l Operates over whole Contract Period (normally 30 years) l Initial DBFO Cos 5-Year Management Plan – in DBFO Contract l Thereafter, amended Plan submitted each Contract Year on rolling basis l Each plan to be agreed with Departments [Agencys] Representative Each Plan includes: l Performance Indicators and Targets for meeting Agencys overall aims and objectives l A Resourced Implementation Plan for meeting such Targets l Methodology for measuring and monitoring performance

14. Safe roads, Reliable journeys, Informed travellers Typical Performance Indicators l Road safety (accidents) l Journey time reliability l Keeping road users informed l Congestion management l Accident / Incident response times l Complaints and claims l Condition / availability of facilities l Environmental management l Sustainability management

15. Safe roads, Reliable journeys, Informed travellers CORE SERVICE DELIVERY REQUIREMENTS DBFO contracts include Core Requirements, which DBFO companies must comply with, reflecting Highways Agencys primary customer care aims, including requirements to: Provide a safe highway Minimise disruption to road users (and other affected parties) Keep travellers informed and also to: Promptly answer all queries from the public Meet objectives of Environmental Statement Achieve high standard in aesthetic appearance of Project

16. Safe roads, Reliable journeys, Informed travellers Contract operates on basis of SELF-CERTIFICATION DBFO Co, Contractor, Designer, Maintenance Contractor, etc required to work under self-regulating QUALITY MANAGEMENT SYSTEMS DBFO Co required to employ a QUALITY DIRECTOR to oversee the operation of all Quality Management Systems Contract includes a DESIGN AND CERTIFICATION PROCESS for confirming that the Works and maintenance operations are carried out in accordance with the Contract Departments Nominee REVIEWS DBFO Cos proposals, and MONITORS and AUDITS the operations Departments Nominee RECEIVES and RESPONDS to all certificates QUALITY MANANAGEMENT

17. Safe roads, Reliable journeys, Informed travellers Typical DBFO Contract Organogram Secretary of State Highways Agency Department's Agent (Design & Construction) Department's Representative (O&M) DBFO Company Contractor Designer Design sub-consultants Operation and Maintenance Funders (Shareholders) (Bond Finance) (Bank Loans) DBFO Agreement (inc. Direct Agreement) Finance Company Construction Contract O & M Contract Design Contract MONITORING AND AUDITING – Role of Agencys Representatives

18. Safe roads, Reliable journeys, Informed travellers Main Activities of Agencys Representatives: l REVIEWING and AGREEING DBFO Cos 5-Year Management Plan l REVIEWING and AUDITING DBFO Cos quality procedures l REVIEWING DBFO Cos design and construction, and operation and maintenance proposals l MONITORING on site construction, and operation and maintenance activities l APPLYING REMEDY (where appropriate)

19. Safe roads, Reliable journeys, Informed travellers Non-Conformance Reports Letters Remedial Notices Penalty Points (generally up to 5 per breach) Warning Notices (material breach or 100+ penalty points in 3 years) Increased monitoring at DBFO Cos cost (50+ penalty points in one year or one Warning Notice) Contractual Remedies:

20. Safe roads, Reliable journeys, Informed travellers Health & Safety Design Review Structures Construction Motorway Communications Motorway Communications Environmental Management Environmental Management Quality Management Quality Management Non-Conformities, Certification & Records Non-Conformities, Certification & Records Traffic Management Traffic Management Operations & Maintenance Operations & Maintenance Public Relations & Communications Public Relations & Communications Land & Third Parties Land & Third Parties Project Forum Senior Managers HA DA/DR DBFO Co Contractor Designer Informal Partnering

21. Safe roads, Reliable journeys, Informed travellers alec.briggs@highways.gsi.gov.uk +44(0)113 283 6303 bdrewett@pellfrischmann.com +44(0)1924 368 145 Thank You!