Guidebook for Performance Metrics for P3 Projects
infrastructure in the United States, as in many other
countries, is aging and limited public funds are available to maintain the
current infrastructure and foster future growth. A potential mechanism to fund
a portion of the ongoing transportation infrastructure needs is public-private
partnership (PPP), which is defined as a
contract between the public and private sectors for the delivery of a project
or service in which the private partner provides the majority of the necessary
financing. There are several examples of successful PPPs
in the United States and in many parts of the world, and PPP has been acknowledged
by many as an innovative approach to the procurement of public projects. In recent years, establishment of the 2015 Build
America Transportation Investment Center (BATIC) and legislation that
facilitates implementation and financing of PPP projects have given increased traction
for implementing PPP projects in the transportation sector. One of the early
requirements in carrying out PPP projects is to develop metrics to measure
in PPP projects should address the public client’s overall strategic plan and
mission objectives, the private sector’s long-term development and payoff
strategy, and the general public’s requirements for quality public facilities
and services. Thus, in PPP projects, performance metrics are more concerned
about what customers’ desire, such as reliable travel times, a safe travel
environment, comfortable ride, etc., and typically are used to manage safety,
heavy vehicles, congestion, winter weather conditions, and toll collection
times, as well as other elements. Common performance metrics that have been used
in previous projects are: (1) lane availability (e.g., deductions for lane
closed, deductions based on a delay cost model); (2) route performance (e.g.,
assessment over specific routes); and (3) condition criteria (e.g., deductions
for lanes seriously affected by snow or ice). Despite the importance of performance
metrics, knowledge is limited about the best practices for selecting metrics
for PPP projects in the United States. To address this knowledge gap, the
proposed project will entail an investigation into the performance measures of PPP
highway transportation projects. Based on the results of this study, a
guidebook will then be developed to provide information on practices that may
assist in selecting key performance measures in PPP highway projects.
The proposed research
should address the following questions:
· What are the key performance metrics
for PPP projects? How can they be measured? How effective are they?
· How can DOTs tie performance metrics to
payment mechanisms (i.e. lane availability, route performance, condition
criteria, safety performance, unplanned events, etc.) to the PPP contractor?
· If the PPP contractor is not in compliance
with performance standards, what actions (e.g., nonconformance reports, penalty
point notices, etc.) should be taken?
· If the PPP
contractor maintains or exceeds the level of performance specified for the
majority of the contract term, what incentives should be provided?
· What techniques have been used to avoid
and resolve disputes? Which have been
most effective and which have been less effective?
· What impact do the structural aspects
of the project organization have on construction and operation performance
The purpose of this project
is to (1) examine performance metrics for PPP projects used by DOTs, as well as
other countries that actively solicit and involve the private sector in the
delivery of highway infrastructure; (2) document lessons learned; and (3) make
implementation recommendations that will improve U.S. policy and practice. This
project will produce an empirical guide based on effective DOT practices
regarding selection of performance measures for PPP projects, and provide
guidance on best practices for implementing those performance measures. The
guidebook will help state departments make key decisions to monitor and control
Federal Highway Administration (2009). “Public-private partnerships for highway infrastructure: Capitalizing on international experience.” International Technology Scanning Program.
Yuan, J. F., Zeng, A. J. Y., Skibniewski, M. J., and Li, Q. M. (2009). “Selection of performance objectives and key performance indicators in public-private partnership projects to achieve value for money.” Constr. Manage. Econom., 27(3), 253–270.
Yuan, J., Skibniewski, J., Li, Q., & Zheng, L. (2009). “Performance objectives selection model in public-private partnership projects based on the perspective of stakeholders.” Journal of Management in Engineering, 26(2), 89–104.
Specific tasks of the research to accomplish the main objective include:
· – Conduct comprehensive literature review of studies related to PPP performance measurement.
· – Benchmark the state-of-the-practice, across the various DOTs and transportation agencies, related to establishing project performance metrics for PPP projects.
· – Prepare a research work plan that describes the details of the research methodology and methods for identifying effective practices and developing conclusions.
· – Conduct representative detailed case studies on current and completed PPP projects to identify effective practices and lessons learned.
· - Execute the research work plan and prepare an interim research report that articulates the data collection and analysis, as well as emerging conclusions, effective practices, lessons learned; develop a proposed outline for the guidebook, the case study report and draft language.
· - Publish the guidebook to assist DOTs in selecting performance measures in PPP highway projects and implementing best practices.
· - Prepare a final research report detailing the complete results of the research.
the construction and operation phases of a project, performance metrics will be
compared with established performance
objectives that serve as a baseline, to determine how successful organizations
have been in attaining their objectives. The payoff of this research will be
significantly improved administration and control of PPP projects, which
ultimately will result in higher public satisfaction. The guidelines will
become available through the TRB/NCHRP libraries and websites. Journal papers and conference presentations
will spread the information to appropriate industry groups, including the DOTs
and other transportation agencies.
|Sponsoring Committee:||AKC20, Project Delivery Methods
|Research Period:||24 - 36 months|
|RNS Developer:||Behzad Esmaeili, Ghada Gad, Darryl VanMeter|
|Index Terms:||Performance measurement, Public private partnerships, Disputes, Incentives, Construction projects, Contract administration, |
Administration and Management