There have been numerous lessons learned throughout the progression of this study as well as those reported in other numerous reports, which contain valuable suggestions. The following summarizes some of the common lessons learned and attempts to quantify the good practices that were uncovered during the course of this project. These good practices should not be confused with those fully accepted by formal best practices procedures.
| Main Theme | Lesson Learned | ||
| Communication and cooperation with Industry | • Good open communication is essential through the project development to its completion (many understand this issue, but it is difficult to put into practice in real projects) • Working together - client, contractor, research organizations & all main organizations in supply chain in the development of new models, innovations, systems, and practices. When moving towards new models and changing practices, it requires good leadership, a lot of time, open communication, and willingness to pursue the "greater good" for the benefit of society. • Create trust (this takes time and successful implementation - client, contractors & consultants) • Develop a procurement strategy with industry inputs via forums or equivalent • Diverse portfolio of projects delivery methods to balance the construction market • Several years forward planning of construction projects • Transparent and equitable procurement process • Coordinate projects with other infra sectors - overheating of marketplace & work • Utilize E-commerce for tendering | ||
| Road Authority Development and Implementation of Innovative Practices | • Understanding that moving toward innovative processes takes a great deal of time. This includes challenging new concepts, change management, key champions, bold decisions, hard and diligent effort, and a willing culture to move forward. So called good "Leadership"! • There are several successful projects for all given project delivery methods • International meetings, benchmarking, sharing information, research, visits, conferences & exchanges provide extra value that cannot normally be obtained in any form of publication • Performance specifications (functional requirements) are a vital part in these innovative models. It is a very slow process of development and is a key lacking aspect, which reduces the potential benefits of the Design-Build and its variations. • Client's experts ability or non-ability to approve innovations and Alternative Technical Concepts (ATCs) • Different practices between the regional offices in road authorities and lack of clear continuity between them. Full standardization of practices not observed. • Environmental & ROW risks are important to overcome and difficult to minimize and transfer to service providers. Many should be resolved before tender or having preliminary approval. • Bundling of small projects provides gains & efficiencies and works reasonably well • Continual re-engineering of the procurement models - or continuous improvement • Traffic management is an expertise that has not been fully developed by the private sector and requires substantial improvement • Consider having an interactive contractor rating system • Consider having an interactive consultant rating system • How to effectively manage the utilities during projects | ||
| • Lump sum contracts provide potential benefits for contractors (avoids unit price quarrels) • Partnering is important • Using financial rewards and penalties • Start using QC by Contractors • Ability to measure Alternative Technical Concepts (ATC) • Not Low-Bid selection criteria (includes other type measures aligned with project objectives) • Consider other options like A+B bidding, Lane Rental, & Incentives and disincentives • Include LCC if possible (some do after tender award) • Consider Value Engineering as early as possible • Utilizing advanced project management information systems & ICT tools • Good communications, quicker responses to questions & inquiries, and better management | |||
| Design-Build (DB) | • It is important to understand all aspects, implementation issues, time to develop correctly, and re-engineer the Design-Build model according to local practices. US DOT & FHWA (2006) and Koppinen & Lahdenpera (2004) are great resources for understanding Design-Build and model improvements • There is a large gap of understanding, expertise, and knowledge with Design-Build models amongst the client organization's experts, especially at the regional level. Even greater differences were noted between the regional offices • Develop Performance-based specifications. (Performance-based specifications have a strong relationship with Design-Build and their other variations) • Limiting the amount of design development before tender (greater advantages with less) • Co-location of Design-Build team with client (Quicker decisions and efficiency) • Using Quality-based selection criteria (guideline - spread of greater than 40% is recommended) • Develop solutions to measure Alternative Technical Concepts (ATC). Warranties are almost a natural progression from ATC • Using real partnering and teaming concepts • Risk matrices and analysis should be developed into DB model • Risks are important and are not easily accepted by service providers. Also optimization takes time • Short-Listing to 3 potential competitors • If possible, bundling several small DB projects • Using a two step process - Request for Qualifications with short-listing and then full tender. Prequalification system should have effectiveness "with Teeth" • Consider the use of stipends | ||
| PPP Model Overall Ministry & Society | • There may be legal issues preventing private finance and may need law changes or government approval • PPP and private finance models can be used effectively, if used wisely • Buy-in from the Ministry of Finance • Need a good "Public Sector Comparator" (Benchmarking capability) • Demonstrating Value for Money - (Must be better than other models) • Selecting a good measurable, objective "Payment Mechanism" (Transparent) • Understanding the influence of banks/private finance • In PPP - consider series of PPP projects and not just one - costs of entering market is high • Financial rating of one's country • There is a limit to amount of projects that can be done via PP model • Difficult to predict into future & what are the political consequences • Influence of project size - recommendation of over 80 million Euros • Other threats to the project like environmental, protest, and political • Rumors that PPP might be a stepping stone for "Road User Charging" (RUC) | ||
| PPP Model Road Authority | • Understanding risks from both a legal, financial and design & construction perspective • Banks/Financiers essentially take no risk • Sharing the refinancing gains with the public clients • Underestimating market risks - causes higher premiums • Traffic avoidance and by-passing tolls or lower cost alternative routes in future • Underestimating the influence of Banks/Financiers/Investors • Developing "Performance Specifications" & "Outcome-Based Criteria" • If you have not outsourced maintenance activities via maintenance contracts, it will be difficult to include all the detailed aspects of maintenance into the PPP contract • Allowing potential for innovation - how to approve "Alternative Technical Concepts" (ATCs) • How to make long-term contracts as flexible as possible • Clear and concise contract language and standardization • Appropriate "Hand-Back Clause" (what condition is the asset is returned back to the authority) • Lack of understanding of DBFO delivery model at all levels (requires a client learning process) • Not taking advantage of the real concept of Design-Build - (it was intended as a "Teaming & Partnering" concept) • Enticing international competition - culture & language (English preferred) • Usually for large projects - typically greater than €60 million • Ability of foreign participants to find/network with reliable national partners • Consider the use of stipends to offset the large tendering costs • Large transaction costs - Legal, technical, & financial expenses are great • Monitoring & measuring acceptance during the "Delivery Phase" (construction portion) • Future potential - no Best And Final Offer (BAFO) stage • If you have not outsourced maintenance activities via maintenance contracts, it will be difficult to include all the detailed aspects of maintenance into the PPP contract | ||
| PPP Model Private Sector Contractors & Others | • Competition mainly for the mega/large companies • Ability to get competitively priced private finance • Large transaction costs - Legal, technical, & financial expenses are great • Professional services rewarded for their savings/innovations in project (shared savings/bonuses) • Making too many decisions too fast with more potential errors • Lack of understanding of DBFO delivery model • Finding sufficient experienced auditors, technical professionals, & supply chain partners | ||
| Alliance Model | • A new spirit of "team work" (seeking the best for the project instead of personal or organization gain. The relatively new "Alliance Model" is designed from this spirit - and is called the "Leadership Model") • Co-location of the project partners is essential in the Alliance model • Is the client able to be neutral party and assure quality practices | ||
| Best Practices | • Design-Build and their contracting variations • PPP and private finance models can be used effectively, if used wisely • Optimizing risks in all project delivery methods • Some form of a measurable "Contractor" rating system (with effectiveness) • Some form of a measurable "Professional Services" rating system (with effectiveness) • Hiring professional services consultant to perform integrated design/planning phases (so called Total Project Management - TPM in Ontario, Canada) • Significant Quality based Selection Criteria for Contractors • Bundling of small projects • Alliance Model - potential to be a best practice, but insufficient data at this time • Sophisticated project management software tool (risks, QC, project tracking, & interfaces) • Common Data modeling (3D) of all design work - no data to support this best practice, but would significantly reduce design errors, omissions, quantities, & interface issues • QC by contractor • Short-Listing to 3 potential competitors | ||