3.4.3 LOW BID OR QUALITY BASED

Another issue that distinguishes the different practices is the type of "Contractor Selection Criteria" used in the tendering procedures. A major portion of the "Anglo-Saxon" countries apply more of a Quality-based selection criterion, with the main exception of VicRoads in Victoria, Australia using the lowest price. On the other hand, there is a split in the northern countries, with British Columbia, Estonia, and Finland using more quality-based criteria, while Alberta, Norway, Ontario, and Sweden using basically the lowest price system. As mentioned earlier, historical traditions or practical considerations may play an important reason, especially if the contracts integrate routine and periodic maintenance. In such circumstances quality requirements, competence and know-how are considered more important aspects as compared to the price, because it is essential to determine the service providers' capability. Even in the USA, more quality based criteria are used in these integrated contracts. These are discussed further in the "Contractor Selection Criteria" section of this report.

However, the "Leadership Model" uses 100% quality criteria for selecting the winner of the tender. Only England's Highways Agency has used the "Leader-ship Model" (E-MAC), and it is too early to determine the effectiveness of this model as it is a unique form for maintenance contracting practice. It would be valuable to study the results and determine if it is worthy of implementation. It is safe to predict that the "Leadership Model" probably will be used in other Anglo-Saxon countries, as this has been the trend to copy practices from one another, and even New Zealand and Western Australia are contemplating testing the model.

IN-HOUSE

OUT SOURCED

ACTIVITIES INCLUDED

CONTRACT TYPE

CONTRACT DURATION

CONTRACTOR SELECTION CRITERIA

AREA OR CORRIDOR CONTRACTS

QUOTED SAVINGS

COMMENTS

Alberta, Canada

X

Routine Maintenance

Unit Hybrid

5, 6&7 Years

95% Price 5% Past Performance

30 Areas

25%

Winter Maintenance Standby receives about 35% Lump Sum Payment

British Columbia Canada

X

Routine Maintenance

Lump Sum

10 Years

60% Price 40% Other

28 Areas

10%

Line Marking & Lighting are not included. A single contractor can only win 4 area contracts

Ontario, Canada

X

Routine Maintenance

Hybrid (Lump Sum & Unit Prices)

7-9 Years

95% Price 5% Other

48 Areas

12%

16 Performance-Based Area Contracts Remainder - "Maintenance Outsourced" by the "Salesman Model"

Estonia

X

X

Routine Maintenance

Hybrid

5 Years New-7 Years

75% Price 25% Other

16 Areas

Up to 20%

Own In-house forces compete against private contractors. 63% of Maintenance is tendered

Norway

X

Routine Maintenance

Hybrid

4 Years

Lowest Price Conforming Tender

107 Areas

20-30%

Client maintains most inspection

Sweden

X

Routine Maintenance

Hybrid

3-6 Years

98% Price 2% Other

136 Areas

20-30%

New Winter Maintenance Payment Scheme based upon actual weather conditions

Finland

X

Routine Maintenance

Hybrid & Lump Sum

3, 5 & 7 Years

75% Price 25% Other

85 Areas

Over 30%

Now separate contracts for line marking, resurfacing, & bridges are Long-term duration

Holland

X

Different Activities

Lump Sum

1-3

100% Price

Many Areas

30-40%

Future - Investigating MAC model from England and will adapt to Holland Situation

Australia (VIC- Roads)

X

X

Routine Maintenance

Lump Sum

2-3+1+1 Years

100% Price

About 50% of Network

Some

Competition between In-House Forces and Private Sector. Still quite input based.

Australia Western, Australia

X

Basically All

Lump Sum

10 Years

50% Price 50% Other

8 Areas

20%

England

X

Basically All

Lump Sum (Unit Price For Undefined)

5 + 2 Years

25% Price/ 75% Other

E-MACis100% Quality (Target Price)

14 Areas

Over 10%

Includes up to £500k worth of periodic maintenance (bridges or resurfacing). E-MAC is similar to the "Alliance Model"

New Zealand

X

Routine Routine Plus ALL

Unit Price Hybrid Lump Sum

3+1 Years 3+1 +1 Years 10 Years

Low Bid Weighted Avg. QPTO

24 Areas

10-15%

Still using about 50% Traditional Maintenance Contracts. Very small staff.

USA (NCDOT)

X

X

Activity Based

Unit Price

1 Year

100% Price

Corridor

Unknown

Outsource those activities that are more efficiently done by contractor or balancing work

USA (MDSHA)

X

X

Activity Based

Unit Price

1 Year

100% Price

Corridor

Unknown

USA (MNDOT)

X

X

Activity Based

Unit Price

1 Year

100% Price

Corridor

Unknown

USA (DDOT)

X

X

Basically All

Lump Sum

5 Years

50% Price 50% Other

Corridor

Unknown

Does not include major bridge rehabilitation

USA (VDOT)

X

X

Basically All Proposed

Lump Sum Lump Sum

5 Years (New) 3+3+3

50% Price -50% Other 100% Price

Corridor

10-15%

Still basically in-house. Only 1 integrated contract (VMS). New contracts planned for routine maintenance 3+3+3 years, with low bid

USA (FDOT)

X
(about 20%)

X

40% Routine Maintenance 40% Salesman

Lump Sum Unit Priced

7+7 Years Yearly

40% Price 60% Other 100% Price

Corridor

20%

Goal is to Achieve 80% Outsourced. Using a Maintenance Rating Program (MRP) to measure performance. 10 Year Rest Area Contract

Table 12 Summary of Maintenance Contracts