The first unsolicited proposal was to take over the maintenance of the Interstate Highway System in Virginia. Virginia Department of Transportation (VDOT) signed a comprehensive agreement with a private company, VMS, for fence-to-fence maintenance responsibility for 1,250 lane miles on Interstates 95, 77, 81, and 381. This five-and-one-half year, fixed-price contract with VDOT was the first interstate highway asset management project in the nation.
The facilities ranged from the urban expressway in Richmond to rural interstate South of Richmond and in mountainous terrain of Southwest Virginia. . The work included all required restorative work such as roadway resurfacing and bridge deck replacement. The level of work accomplished is that required to meet a pre-determined roadway performance criteria. An independent assessment of the cost efficiency of the pilot project estimated that VDOT saved about $16-23 million dollars over a five-year period. The cost savings have been attributed to the contractor's ability to procure labor, equipment, and material for lower costs. The contact was extended for another five years continuing levels of savings commensurate with the first five years.
The advantages for VDOT have been not only the cost savings but a guaranteed fixed price. There have been no change orders and no claims which would normally increase prices under traditional methods. Throughout the contract period the contracted sections of the road way have shown significant and steady improvement. The risk is virtually all on the contractor. When weather conditions are like they were last winter and VDOT exceeded it snow removal budget, VDOT experienced a fixed cost on 1250 lane miles.