Performance-Based Contracting—Yes or No: An In-Depth Analysis

In the fall of 2006 the Indiana Department of Transportation (INDOT) initiated a study to investigate performance-based contracting of maintenance operations. One of the main impetuses for the study is that INDOT started a 10-year road building program called Major Moves that will add more than 1,000 lane miles to the current network. With this addition and coupled with a trend of reduction in maintenance personnel, INDOT is planning how maintenance will be performed. One option is the use of performance-based contracting (PBC). This study evaluated many aspects of PBC and produced an in-depth analysis of PBC. Information on how to implement, pros and cons, and recommendations to consider are described in this paper. Other options are discussed in the paper. This information should be helpful to agencies contemplating PBC for maintenance operations.