There has been so much terminology regarding these various forms and names applied to maintenance contracting that it can be quite confusing or overwhelming at times. The goal is to clarify these terms and simplify the concepts. It is interesting to note that many countries refer to different names for these practices, but essentially refer to the basic concepts. Some examples of various terminology used is as follows.
• Asset Management Contracts
• Asset Maintenance Contracts
• Performance Specified Maintenance Contracts (PSMC)
• Long-Term Maintenance Contracts
• Long-Term Performance Contracts
• Managing Agent Contracts (MAC & E-MAC)
• Area Maintenance Contracts
• Maintenance Area Contracts
• Term Maintenance Contracts
• Term Network Contracts
• Maintenance By Contract
• Performance-Based Contracts
• Performance Contracting
• Total Maintenance Contracting
• Alliance Contracting
The names used basically refer to the outsourcing of either routine maintenance, periodic maintenance, both routine and periodic maintenance, or all maintenance services, that are using some form of outcome-based criteria (performance levels) or "Level of Service" for a long duration (often 3-10 years). Some of the terminology used in many cases describes a new philosophy and attempts to minimize the deterioration of the asset through lower "Life Cycle Cost". Some of these contracts may even include improvements or rehabilitation, and hence use the term called asset management contracting.
Performance contracting is also used to describe the level of performance or desired level of service. It should be illustrated that there are no true "pure performance" contracts to the authors' knowledge that pay according to the actual measured performance as done in various sporting events. The higher performance achieved, the better the rewards and the lower the performance the lower the rewards. These may have been some of the desires or initial thoughts, but to pay for "true performance" is difficult and most road authorities are at the discretion of the yearly budget, which makes a "true performance" difficult or unlikely to arrange. There have been various forms of incentives and disincentives used in these contracts, and are usually limited to a minimum bottom level and a maximum amount for the top level.
As a summary, there are various forms of terminology used and they vary from country to country, and the main idea is to achieve a contract that provides client derived performance requirements, some flexibility, describes the maintenance activities incorporated, and determines contract duration. The outcome should be a contract that provides opportunities for innovation, incentives, a spirit of cooperation or partnering, maximizes LCC for maintenance, flexibility (describing the performance and not technical or rigid details), and a balanced agreement that would sustain a competitive maintenance industry.