Performance-Based Contracting for Maintenance

Performance-Based Maintenance Contracting (PBMC) provides incentives and disincentives to achieve desired outcomes or results from the maintenance contractor. This is distinct from the more usual practice for highway maintenance contractinglow bid combined with method specification. This report explores experience with PBMC in places where it has been adopted, including such issues as whether it has the potential to reduce costs and improve maintenance levels of service. Methods for implementing PBMC are also discussed. The report is likely to be useful for those agencies who are evaluating whether to include PBMC in their highway maintenance program. Information for this study was gathered by literature review of international experience, domestic U.S. state experience, federal government experience, and warranty contracts, as well as surveys conducted of state transportation agencies, Canadian provincial agencies, and a sampling of private firms. The surveys were augmented with individual interviews.