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Contract Administration: Technology and Practice in Europe

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Office of International Programs FHWA/US DOT (HPIP)
400 Seventh Street, SW
Washington, DC 20590

Tel: 202-366-9636
Fax: 202-366-9626

international@fhwa.dot.gov
www.international.fhwa.dot.gov

Publication No. FHWA-PL-02-016
HPIP/09-02(5M)


NOTICE

The contents of this report reflect the views of the authors, who are responsible for the facts and accuracy of the data presented herein. The contents do not necessarily reflect the official policy of the Department of Transportation.

The metric units reported are those used in common practice by the persons interviewed. They have not been converted to pure SI units because in some cases, the level of precision implied would have been changed.

The United States Government does not endorse products or manufacturers. Trademarks or manufacturers' names appear herein only because they are considered essential to the document.

The publication of this document was sponsored by the U.S. Federal Highway Administration under contract number DTFH61-99-C00005. awarded to American Trade Initiatives, Inc. Any opinions, options, findings, conclusions, or recommendations expressed herein are those of the authors and do not necessarily reflect those of the U.S. Government, the authors' parent institutions, or American Trade Initiatives, Inc.

This report does not constitute a standard, specification, or regulation.


Technical Report Documentation Page
1. Report No.
FHWA-PL-03-002
2.Government Accession No. 3.Recipient's Catalog No.
4. Title and Subtitle
Contract Administration: Technology and Practice in Europe
5.Report Date
October 2002
6. Performing Organization Code
7. Author(s) David O. Cox, Keith R. Molenaar, James J. Ernzen, Gregory Henk, Tanya C. Matthews, Nancy Smith, Alex Levy, Ronald C. Williams, Frank Gee, Jeffrey Kolb, Len Sanderson, Gary C. Whited, John W. Wight,Gerald Yakowenko 8.Performing Organization Report No.

9. Performing Organization Name and Address
American Trade Initiatives
P.O. Box 8228
Alexandria, VA 22306-8228

10. Work Unit No.(TRAIS)
11. Contract or Grant No.
DTFH61-99-C-0005
12. Sponsoring Agency Name and Address
Office of International Programs
Office of Policy
Federal Highway Administration
U.S. Department of Transportation
13.Type of Report and Period Covered
14.Sponsoring Agency Code
15. Supplementary Notes
FHWA COTR: Hana Maier, Office of International Programs

16. Abstract
In June 2001 a team comprising Federal, State, contracting, legal, and academic representatives traveled to Portugal, the Netherlands, France, and England to investigate and document alternative contract administration procedures for possible implementation in the United States.

The scan team discovered that European highway agencies appear to be better exploiting the efficiencies and resources that the private sector offers, through the use of innovative financing, alternative contracting techniques, design-build, concessions, performance contracting, and active asset management. European agencies have created contracts that focus on the users, while seeking to allocate risk appropriately and establish an atmosphere of trust in the implementation of procedures. The United States can directly and immediately employ many European procedures to help cope with its most urgent transportation needs. The report discusses these European techniques in terms of procurement, contract types, and payment mechanisms.

17. Key Words

Best-value selection, performance specifications, design-build, shadow tolls, public-private partnerships, concessions, design-build-operate-maintain

18. Distribution Statement

No restrictions. This document is available to the public from the Office of International Programs FHWA-HPIP, Room 3325 US Dept. of Transportation Washington, DC 20590

international@fhwa.dot.gov, international.fhwa.dot.gov

19. Security Classif. (of this report)
Unclassified
20. Security Classif. (of this page)
Unclassified
21. No. of Pages
112

22. Price
Free

Reproduction of completed page authorized Form DOT F 1700.7 (8-72)

CONTRACT ADMINISTRATION: TECHNOLOGY
AND PRACTICE IN EUROPE

PREPARED BY THE SCANNING TEAM:

David O. Cox
FHWA

Keith R. Molenaar
University of Colorado

James J. Ernzen
Arizona State University

Gregory G. Henk
HGB Flatirons, Inc.

Tanya C. Matthews
TMG Construction Corp.

Nancy C. Smith
Nossaman, Guthner, Knox & Elliott

Alex Levy
FHWA

Ronald C. Williams
Arizona DOT

Charlie Franklin (Frank) Gee
Virginia DOT

Jeffrey W. Kolb
FHWA

Len Sanderson
North Carolina DOT

Gary C. Whited
Wisconsin DOT

John W. Wight
HNTB Corporation

Gerald Yakowenko
FHWA

and

American Trade Initiatives, Inc.
&
Avalon Integrated Services, Inc.

for the

Federal Highway Administration
U.S. Department of Transportation

and

The American Association of State Highway and
Transportation Officials

and

The National Cooperative Highway Research Program
(Panel 20-36)
of the Transportation Research Board

October 2002


FHWA INTERNATIONAL TECHNOLOGY EXCHANGE PROGRAMS

The FHWA's international programs focus on meeting the growing demands of its partners at the Federal, State, and local levels for access to information on state-of-the-art technology and the best practices used worldwide. While the FHWA is considered a world leader in highway transportation, the domestic highway community is very interested in the advanced technologies being developed by other countries, as well as innovative organizational and financing techniques used by the FHWA's international counterparts.

INTERNATIONAL TECHNOLOGY SCANNING PROGRAM

The International Technology Scanning Program accesses and evaluates foreign technologies and innovations that could significantly benefit U.S. highway transportation systems. Access to foreign innovations is strengthened by U.S. participation in the technical committees of international highway organizations and through bilateral technical exchange agreements with selected nations. The program has undertaken cooperatives with the American Association of State Highway Transportation Officials and its Select Committee on International Activities, and the Transportation Research Board's National Highway Research Cooperative Program (Panel 20-36), the private sector, and academia.

Priority topic areas are jointly determined by the FHWA and its partners. Teams of specialists in the specific areas of expertise being investigated are formed and sent to countries where significant advances and innovations have been made in technology, management practices, organizational structure, program delivery, and financing. Teams usually include Federal and State highway officials, private sector and industry association representatives, as well as members of the academic community.

The FHWA has organized more than 50 of these reviews and disseminated results nationwide. Topics have encompassed pavements, bridge construction and maintenance, contracting, intermodal transport, organizational management, winter road maintenance, safety, intelligent transportation systems, planning, and policy. Findings are recommended for follow-up with further research and pilot or demonstration projects to verify adaptability to the United States. Information about the scan findings and results of pilot programs are then disseminated nationally to State and local highway transportation officials and the private sector for implementation.

This program has resulted in significant improvements and savings in road program technologies and practices throughout the United States, particularly in the areas of structures, pavements, safety, and winter road maintenance. Joint research and technology-sharing projects have also been launched with international counterparts, further conserving resources and advancing the state of the art.

For a complete list of International Technology Scanning topics, and to order free copies of the reports, please see list on the facing page.

Website: international.fhwa.dot.gov
Email: international@fhwa.dot.gov


FHWA INTERNATIONAL TECHNOLOGY EXCHANGE REPORTS

International Technology Scanning Program: Bringing Global Innovations to U.S. Highways

Infrastructure

Geotechnical Engineering Practices in Canada and Europe
Geotechnology--Soil Nailing
International Contract Administration Techniques for Quality Enhancement-CATQEST
Contract Administration: Technology and Practice in Europe

Pavements

European Asphalt Technology
European Concrete Technology
South African Pavement Technology
Highway/Commercial Vehicle Interaction
Recycled Materials in European Highway Environments
Pavement Preservation Technology in France, South Africa, and Australia

Bridges

European Bridge Structures
Asian Bridge Structures
Bridge Maintenance Coatings
European Practices for Bridge Scour and Stream Instability Countermeasures
Advanced Composites in Bridges in Europe and Japan
Steel Bridge Fabrication Technologies in Europe and Japan
Performance of Concrete Segmental and Cable-Stayed Bridges in Europe

Planning and Environment

Sustainable Transportation Practices in Europe
Wildlife Habitat Connectivity Across European Highways
European Right-of-Way and Utilities Best Practices
European Intermodal Programs: Planning, Policy and Technology
National Travel Surveys
Recycled Materials in European Highway Environments
Geometric Design Practices for European Roads

Safety

Pedestrian and Bicycle Safety in England, Germany and the Netherlands
Speed Management and Enforcement Technology: Europe & Australia
Safety Management Practices in Japan, Australia, and New Zealand
Road Safety Audits--Final Report
Road Safety Audits--Case Studies
Innovative Traffic Control Technology & Practice in Europe
Commercial Vehicle Safety Technology & Practice in Europe
Methods and Procedures to Reduce Motorist Delays in European Work Zones

Operations

Freight Transportation: The European Market
Advanced Transportation Technology
European Traffic Monitoring
Traffic Management and Traveler Information Systems
European Winter Service Technology
Snowbreak Forest Book - Highway Snowstorm Countermeasure Manual (Translated from Japanese)
European Road Lighting Technologies

Policy & Information

Emerging Models for Delivering Transportation Programs and Services
Acquiring Highway Transportation Information from Abroad--Handbook
Acquiring Highway Transportation Information from Abroad--Final Report
International Guide to Highway Transportation Information

All publications are available on the internet at www.international.fhwa.dot.gov


ABBREVIATIONS AND ACRONYMS

Letters Meaning
AASHTO American Association of State and Highway Transportation Officials
AMPM Active management payment mechanism
ARTBA American Road and Transportation Builder's Association
CATQUEST 1994 Contract Administration Techniques for Quality Enhancement Study Tour
CIRIA Construction Industry Research and Information Association
DBFO Design-build-finance-operate
DBM Design-build-maintain
DBOM Design-build-operate-maintain
DOT Department of Transportation
EIB European Investment Bank
EU European Union
FHWA Federal Highway Administration
FTA Federal Transit Administration
ID/IQ Indefinite delivery/indefinite quantity
IEP Instituto das Estratas de Portugal, Portuguese Highways Agency
IRS Internal Revenue Service
ISC Integrated supply chain
MAC Managing agent contract
NCHRP National Cooperative Highway Research Program
NPV Net present value
PFI Private finance initiative
PFMAC Private financing managing agent contract
PPC Public-Private Comparator
PPP Public-private partnership
PRIDe Performance Review Improvement and Delivery group
QA/QC Quality assurance/quality control
RFP Request for proposal
RFQ Request for qualifications
RWS Rijkswaterstaat, Dutch national department in charge of infrastructure, including roads
SHA State highway agency
SIB State infrastructure banks
STIP Scanning technology implementation phase
TRB Transportation Research Board

CONTENTS

CHAPTER 1: EXECUTIVE SUMMARY
Drivers of Change in Europe
Contracting Techniques
Design-Build
Performance Contracting
Alternative Financing
Concessions
Conclusions and Recommendations
 
CHAPTER 2: INTRODUCTION
Background
Purpose and Scope
Methodology
Preview of the Report
 
CHAPTER 3: CONTRACTING TECHNIQUES
Procurement
Contract Types
Payment Mechanisms
Summary
 
CHAPTER 4: DESIGN-BUILD
Types of Projects Utilizing Design-Build
Design-Builder Selection
Percentage of Design in the Solicitation
Design and Construction Administration
Risk Allocation
Use of Warranties
Design-Build-Operate-Maintain
Summary
 
CHAPTER 5: PERFORMANCE CONTRACTING
Performance Specifications
Performance Indicators
Warranties
Quality Assurance/Quality Control
Summary
 
CHAPTER 6: ALTERNATIVE FINANCING
Funding Sources
Payment Mechanisms
Summary
 
CHAPTER 7: CONCESSIONS
Concessions as a Part of Strategic Plans for Road Networks
Selection of Concessionaires
Duration of Concessions
Measuring the Performance of Concessions
Summary
 
CHAPTER 8: RECOMMENDATIONS
Primary Recommendations
Additional Recommendations
 
BIBLIOGRAPHY
 
APPENDIX A: SCANNING TEAM MEMBERS
Team Member Affiliations
Team Member Biographic Sketches
 
APPENDIX B: CONTACTS IN HOST COUNTRIES
United Kingdom
France
The Netherlands
Portugal
Sweden
 
APPENDIX C: AMPLIFYING QUESTIONS
Contract Administration Panel
I. Contracting Techniques
II. Design-Build
III. Alternative Financing
IV. Performance Contracting
V. Payment Methods
VI. Asset Management

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