Overview

The traditional way of contracting out road maintenance is based on the amount of work being measured and paid for on agreed rates for different work items. These are also referred to as unit price contracts. By contrast, Performance-Based Road Management and Maintenance Contracts define minimum conditions of road, bridge, and traffic assets that have to be met by the contractor, as well as other services such as the collection and management of asset inventory data, call-out and attendance to emergencies, and response to public requests, complaints and feedback. Payments are based on how well the contractor manages to comply with the performance standards or service levels defined in the contract, and not on the amount of works and services executed. Performance Contracts are defining a product and it is up to the contractor how to achieve this. Therefore, work selection, design and delivery are all his responsibility. Hence, the choice and application of technology and the pursuit of innovative materials, processes and management are all up to the contractor. This allocates higher risk to the contractor compared to traditional contract arrangements, but at the same time opens up opportunities to increase his margins where improved efficiencies and effectiveness of design, process, technology or management are able to reduce the cost of achieving the specified performance standards.   

The first Performance-Based Road Management and Maintenance Contracts have been developed and implemented in Latin America, Australia, New Zealand, and North America in the early to mid '90. Since than, PMMR has spread to Europe, Asia, and more recently to African countries. Promoted by international development institutions like the World Bank, the Asian Development Bank, and the European Development Bank PMMR is increasingly being introduced in many countries around the world.

A good overview of PMMR is being provided by the following two publications:

• Performance-based Contracting for Preservation and Improvement of Road Assets, Natalya Stankevich, Navaid Qureshi and Cesar Queiroz, Transport Note No. TN-27, The World Bank, September 2005, and

• Cutting Costs and Improving Quality through Performance-Based Road Management and Maintenance Contracts - The Latin American and OECD Experiences , Dr. Gunter Zietlow, University of Birmingham (UK), Senior Road Executives Programme, Restructuring Road Management, Birmingham, 24-29 April 2005.

More literature on the experience of different countries with PMMR or some more specific aspects of PMMR can be found under "Articles on Performance-based Road Management and Maintenance" in Documents

For the development and implementation of PMMR, it is recommended to consult the following documents:

• Sample Terms of Reference for the Preparation and Procurement, Contract Supervision and Facilitation and Training
• Bidding and Contract Documents
• Training Materials

 In addition, there are several presentations that deal with different aspects of PMMR.

Last not least, this website will be updated periodically and the most recent information will be found under Recent Publications.