Contracting for Road Maintenance in the Netherlands—The Downside of Performance-Based Contracting

Gelderman, Cees J.; Semeijn, Janjaap; Vries, S. de

doi:10.3390/infrastructures4030041

Cited by 10 publications

(7 citation statements)

References 37 publications

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“…Contract duration, activity type, and contract size-the large projects with strong competition, long duration and extension periods, long outsourced road sections that incorporate crack sealing, pothole repair, illumination repair/maintenance, and mowing activities, and favour PBMC [8] Cumulative equivalent single axle load, speed of construction work, the traffic, and rainfall have been used in the game theory and the simulation for the optimization of benefit for the client and profit for the contractor [9] Performance levels and contractual performance criteria [4], [12] and thresholds for applying penalties/ incentives [13]-mathematical optimization models and a computational tool have been developed in order to meet contractual conditions: (1) types of performance indicators; (2) their threshold levels; and (3) the appropriate levels of penalties and incentives [10] Risks allocation between the participants [2,4,14,15]: if too much risk is allocated to the contractor, the price will be high, and if too little risk is transferred, then the goal of obtaining efficiency and effectiveness of the contract is not achieved [9] e method of contractor selection-cost reductions was largest when contractors faced strong competition and have gained experiences with PBCs [5] Based on the analysed literature, the factors influencing the pilot project implementation can be divided as follows:…”

Section: Methodsmentioning

confidence: 99%

Proposition of a Model for Selection of the Hybrid Contract Implementation Strategy for a Pilot Project of Regular Road Maintenance in Montenegro

Rutešić

Ćetković

Lakić

et al. 2020

Advances in Civil Engineering

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Performance-based maintenance contracts (PBMCs) are modern contracts that should allow road maintenance entities to contract maintenance activities more successfully and generate money value. In the case of Montenegro, a gradual approach of PBMC introduction is recommended through a hybrid contract for routine road maintenance. Hybrid contract implementation will enable a lower level of client risk in the early stages of PBM contract. Game theory is used for selection of an adequate model for hybrid contract structure in terms of size and nature of the BoQ elements. In addition to the estimated or charged quantities of works from previous contracts, the model also includes parameters that to some extent take into account the experience and expertise of contractors and clients, but also the availability of road data. In order for model to be applied, historical data from traditional road maintenance contracts, which were implemented in the previous period in Montenegro, are used.

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Section: Methodsmentioning

confidence: 99%

Proposition of a Model for Selection of the Hybrid Contract Implementation Strategy for a Pilot Project of Regular Road Maintenance in Montenegro

Rutešić

Ćetković

Lakić

et al. 2020

Advances in Civil Engineering

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“…According to the above deduction, the general expression of the probability which performing CM at the λth inspection can be expressed as Eq. ( 17): (15) where…”

Section: Probability Of Corrective Renewalmentioning

confidence: 99%

“…In recent years, PBC has been widely applied in various fields, therefore the amount of academic research related to PBC is also gradually increasing. Nevertheless, the main research attention is put on contracts [11,12], risks [13][14][15][16], incentives [17], and performance metrics [18]. Tan [11] proposed a new analytical model, which helps to determine the parameters and analyze contracts.…”

Section: Introductionmentioning

confidence: 99%

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-based Contracting

Zhu

Wen

et al. 2023

Chin. J. Mech. Eng.

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With the further development of service-oriented, performance-based contracting (PBC) has been widely adopted in industry and manufacturing. However, maintenance optimization problems under PBC have not received enough attention. To further extend the scope of PBC’s application in the field of maintenance optimization, we investigate the condition-based maintenance (CBM) optimization for gamma deteriorating systems under PBC. Considering the repairable single-component system subject to the gamma degradation process, this paper proposes a CBM optimization model to maximize the profit and improve system performance at a relatively low cost under PBC. In the proposed CBM model, the first inspection interval has been considered in order to reduce the inspection frequency and the cost rate. Then, a particle swarm algorithm (PSO) and related solution procedure are presented to solve the multiple decision variables in our proposed model. In the end, a numerical example is provided so as to demonstrate the superiority of the presented model. By comparing the proposed policy with the conventional ones, the superiority of our proposed policy is proved, which can bring more profits to providers and improve performance. Sensitivity analysis is conducted in order to research the effect of corrective maintenance cost and time required for corrective maintenance on optimization policy. A comparative study is given to illustrate the necessity of distinguishing the first inspection interval or not.

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“…In recent years, with the wide application of PBC, the research on PBC has gradually increased. However, most existing studies on PBC concentrate on contracts [13,14], risks [15][16][17][18], incentives [19,20], and performance metrics [21]. Tan [14] developed a distribution-free contract that sets the guaranteed energy savings level based on the mean and the standard deviation of the energy savings and the profit-sharing ratio between the energy service companies (ESCO) and the energy user.…”

Section: Introductionmentioning

confidence: 99%

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-Based Contracting

Zhu

Wen

et al. 2021

Preprint

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As a new form of support contract, performance-based contracting (PBC) has been extensively adopted in industry and manufacturing recent years. However, maintenance optimization problems under PBC have not received enough attention. In order to further expand the application of PBC in the field of maintenance optimization, we investigate the condition-based maintenance (CBM) optimization for gamma deteriorating systems under PBC. Considering the repairable single-component system subject to the gamma degradation process, this paper proposes a CBM optimization model with an objective of maximizing the profit and improving system performance at a lower cost under PBC. In the proposed CBM model, first inspection interval is considered to reduce the inspection frequency and the cost. Then, a particle swarm algorithm (PSO) and related solution procedure are presented in order to solve the multiple decision variables in our proposed model. Finally, a numerical example is provided to illustrate the applicability and effectiveness of our proposed model. Through comparing the proposed policy with the conventional one, the superiority of our proposed policy is proved, which can bring more profits to providers and improve performance. Sensitivity analysis is conducted to investigate the effect of corrective maintenance cost and time required for corrective maintenance to optimization policy. Comparative study is given to illustrate the necessity of distinguishing first inspection interval and repeat inspection interval.

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Contracting for Road Maintenance in the Netherlands—The Downside of Performance-Based Contracting

Cited by 10 publications

References 37 publications

Proposition of a Model for Selection of the Hybrid Contract Implementation Strategy for a Pilot Project of Regular Road Maintenance in Montenegro

Proposition of a Model for Selection of the Hybrid Contract Implementation Strategy for a Pilot Project of Regular Road Maintenance in Montenegro

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-based Contracting

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-Based Contracting

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