European Bank for Reconstruction and Development (EBRD)

London, United Kingdom, May 24, 2011

Output and Performance-Based

Road Contracts (OPRC)

Gunter Zietlow
e-mail: g@zietlow.com
1 http://www.zietlow.com
http://www.performance-based-road-contracts.com
 Overview of Presentation (1)

Overview of the OPRC concept

Background
Benefits
Performance standards
Risks
Performance monitoring
Payment and incentive systems
)
2
 Overview of Presentation (2)

Key external and internal factors

associated with the implementation
of OPRCs
Legal framework
Financial framework
Institutional framework
Role and capacity of road agencies
Role and capacity of consulting and
contracting industry
3
 Overview of Presentation (3)

Implementation experiences
New Zealand
USA
UK
Finland
Estonia
Serbia
Croatia (Contract under preparation)
Ukraine (Contract under preparation)
4
 Overview of Presentation (4)

Recommended implementation
strategy
Seven steps of successful
implementation
Role of financing institutions
Strategy for implementing OPRC in FSU
countries

5
 Overview of the OPRC or PBC Concept

6
 Performance Based Road Contracts

 Performance Contract (Western Australia)

 Asset Management Contract (USA)
 Performance-Specified Maintenance
Contract (Australia, New Zealand)
 Contract for Rehabilitation and
Maintenance (Argentina, Brazil)
 Area Maintenance Contract (Finland,
Ontario/Canada)
 Managing Agent Contract (UK)
 Output and Performance Road Contract
7
(World Bank)
 Background
 Despite the importance of roads many
countries spent less than 50% of the
required amounts for road maintenance.
 This results in poor road conditions with
higher cost to the road user and higher
overall spending on roads due to high
road rehabilitation cost.
A stitch in time saves nine

8
 Background

 Long-term performance contracts can

effectively guarantee good road
conditions thus saving cost to road users
and road agencies.
 In addition performance contracts can
deliver the same road service levels at
lower cost than traditional contracts.

9
 Type of Contracts
 Method based contract
Unit rates for work items
Payments are based on quantity of
completed work
 Performance contract
Performance Standards or Service Quality
Levels
Fixed monthly payments if service quality
levels are complied with
 Hybrid contract
Mixture of method based contract and
10 performance contract
 Nature of OPRC (1)

 Performance or Service Levels define the

minimum conditions of road, bridge and traffic
assets as well as the management and operation
of the assets during the entire contract period,
leaving it mainly to the contractor as to how to
achieve them.
 The contractor is fairly free to decide
 What to do
 When to do
 How to do
 Where to do
 To do the physical works himself or subcontract
as long as he meets the performance or service levels and
11 other conditions defined in the contract during the
entire contract period
 Nature of OPRC (2)

 Lump sum payments are made

periodically (mainly monthly) and might
be adjusted in accordance with the
change of certain factors, like inflation or
unexpected increases of traffic volume.
 Major emergency, rehabilitation and
improvement works might be paid based
on unit prices for works agreed case by
case.

12
 Nature of OPRC (3)

 Deductions are being made for non-

compliance with terms and conditions of
contract, especially with respect to the
service levels.
 Duration of contracts should at least
include one periodic maintenance cycle
(4-5 years for gravel roads and 8-12 years
for bituminous roads). Pure routine
maintenance contracts are normally
between 1-3 years. Pilot contracts may be
13 of shorter duration.
 Nature of OPRCs (4)

Complexity
Routine and periodic Up to 30 years
maintenance

Routine
maintenance

Construction, periodic and

routine maintenance

14 2 4 6 8 10 12 14
Contract duration in years
 Potential Scope of Services and Works
of OPRC

Road Network
Management and Operation

Routine Winter Periodic

Maintenance Services Maintenance

Emergencies Rehabilitation Improvements

OPRC potential
15
 Contractual Relationship (1)

Audit
Client/ by Client
or External
Road Administration Auditor

Full Performance Contract

Consultant/Contractor

16
 Contractual Relationship with Hybrid
Type OPRC

Audit
by Client Client/
or External Road Administration
Auditor

Performance or
Hybrid type OPRC
Conventional Contract

Road Manager New Type

Engineer Contractor
Inspection of Compliance with Service Levels
17
Supervision for Admeasured Work
 New Type of Contractor

Relationship of required skills as a function

of the duration of OPRC
Skills

Typical „consultant“ skills

Prediction of asset deterioration
Quality assurance management

Typical contractor skills

18 Duration of contract
 Brief History of PBC / OPRC

 1988 British Columbia, Canada

 1990 Argentina
 1994-98 Colombia, Uruguay, Chile, Brazil,
Peru
 1995 Sydney, Australia, Estonia
 1996 Virginia, USA
 1998 New Zealand, Finland
 2001 Chad, Zambia, England,
India, Spain
 .............
19 Drivers: efficiency and effectiveness
20
Source: World Bank, 2006
 Benefits of OPRC (1)

Road Agency
Reduces workload of staff
Reduces maintenance cost (based on
the same level of service!)
Avoids frequent claims and contract
amendments to increase quantities of
works by contractor
Avoids road rehabilitation
Improves quality of rehabilitation
works, if needed
21
Improves control and enforcement of
effective road quality service levels
 Benefits of OPRC (2)
Road Users
Provides better and safer roads with
consistent conditions
Reduces road user cost
Consultants and Contractors
Guarantees workload over longer
period
Provides potential for increased
margins
Opens excellent opportunities for
22 business growth
 Reported Savings by Introducing
Performance Contracts
 New Zealand: 15-22%
 Australia: 10-35%
 Brazil: 15%
 USA: 10-18%
 Finland: 18%
 Alberta, Canada: 20%

Savings are reported against traditional unit price

contracts
In addition, quality improvements were reported
23
 Development of Road Maintenance
Cost in Sydney, Australia
% 1991 Rates
100

80

60

40 RTA (Team of the Roads and Traffic Authority of New South Wales)
SOR Contract
Private contractor
20 Performance
Transfield ContractSpecified Road Maintenance Contract

0
0 10 20 30 40 50 60 70
24 Time (months from June 1991)
 Some Reasons for Reduction in Road
Maintenance Cost
Drivers of savings: Incentives /
competition / long-term management
Modern management and work
procedures
Increased labour productivity
Total life cycle costing
Just-in-time maintenance
Better use of latest technologies

25
 Performance / Service Levels

Objectives
To satisfy the road user
accessibility
comfort
travel speed
safety
To minimize total system cost (cost to
road users and agency – life-cycle cost
of assets)
To minimize environmental impacts
26
 Service Levels and Response Times

 Fulfil objective
 Clearly defined
 Objectively measurable
 Affordable
 In compliance with the law (law of public
roads, ordinance on maintenance and
protection of roads)

27
 Relationship between Objectives
and Service Levels
 Improve road safety: Potholes not bigger
than 15cm in diameter, ruts <15mm deep,
friction coefficient >0.4, etc.
 Preserve road asset value: Cracks not
wider than 3mm, potholes not bigger than
15cm, obstruction of drainage channels
<15% of flow area, etc.
 Reduce vehicle operating cost:
Roughness IRI < 3
 Travel time: Average travel speed > 50
km/hr
 ............
28
 Typical Service Levels and Response Times
for Paved Roads

Typical Traffic Volumes Less 250 – 1000 - 5000 -

(Vehicles/day) than 250 1000 5000 plus

Potholes (Max Dia of any single 400mm 300mm 200mm 100mm

pothole)

Repair of potholes (Response time) 28 days 28 days 14 days 7 days

Cleanliness of pavement surface 8 hrs 4 hrs 2 hrs 1 hr

and shoulders response time for
safety related matters (Response
time)

World Bank

29
 Distribution of Risk

In-house Outsourcing Performance-Based Long-term Road

Mainte- Specific Concessions (BFOT)
nance Maintenance Road Management and
Works Maintenance Contracts

Short- Medium- Long-

term term term

Risk to contractor increases

Risk to road agency decreases

30
 Risk Identification

There are three fundamental risks:

background risk
 Political, legal and regulatory risks
 Monetary and macro-economic risks
 Force majeure including extreme weather
conditions
cost risk, a risk of exceeding initial cost
estimates for the construction or operation of the
project
revenue risk if the client does not pay on time
31
social acceptability risk
 Risk Sharing

 OPRCs require the principle acceptance of

sharing risk between the client and the contractor.
 Private contractors are willing to take some of the
project risks, provided that the nature of the risks
relates to their expertise so that they will be able
to properly assess the consequences. The
expected remuneration is proportionate to the
level of risk they will bear.
 Asking the private sector to bear risks that could
best be handled by the public sector will usually
result in either withdrawal of the private partners
who refuse to take the risk, or premature
termination by the contractor, with the possibility
of him going bankrupt.
32
 Risk Mitigation
 Background risks
 Born by client
 Cost risks
 Proper prediction of asset deterioration !!!
 Prediction of weather conditions (winter maintenance)
 Payment adjustment formula to cope with inflation
 Reduction of risk by changing to re-measured work
 Revenue risks
 Payment guarantee
 Social acceptability
 Involvement of the road agency’s staff
 Involvement of the public
33
 Performance Monitoring

 Contractor’s self-control system

 Inspections by client
 Road user complaints

34
 Payment and Incentive Systems

 Fixed periodic payments for scope of

works and services contracted under
performance or service levels, mainly for
routine maintenance works.
 Payments based on unit prices and
quantities of work performed typically for
“risky” work items such as Emergency
and Unforeseen Works and often for
periodic maintenance and rehabilitation
works as well.

35
 Payment and Incentive Systems

 Periodic fixed payments to be reduced if

contractor does not comply with the
performance service levels
 Contract to be terminated prematurely for
underperformance
 Some contracts include bonus payments
 Payment and incentive systems vary
widely from one country to another

36
 Example for Payment Reductions
Sample Bidding Documents, WB

CRITERIA CONDITIONS FOR UNIT RATES FOR

APPLICATION OF PAYMENT NON
REDUCTIONS COMPLIANCE

Pothole Either the maximum size 50% of monthly

or number exceed the lump sum for one km
per day, applied to
threshold values anywhere each one-km section
in a one km section that does not comply

Rut depth The maximum depth 50% of the monthly

measured anywhere in a on lump sum per day
km section is above the for the length of road
threshold value which does not

Vertical traffic One or more traffic signs are 25% of the monthly
signs absent, destroyed, non- lump sum for one km
legible, incorrectly placed or per day, applied to
37 non-functional each one km section
that does not comply.
 Example of Sample Bidding
Documents

 Sample Bidding Document: Procurement

of Works and Services under Output- and
Performance-Based Road Contracts
(World Bank 2006)
 State Highway Maintenance Contract
Proforma Manual SM032 (Transit New
Zealand 2008)

38
 Key external and internal factors
associated with the implementation of
OPRCs

39
 Framework

 Legal
 Multi-year contracting
 Road maintenance regulations
 Financial
 Multi-year financing
 Dedicated funds
 Institutional
 Separation of client and contractor
 Competition between contractors

40
 Role and Capacity of Road Agency

 Role
 Implementation and development of OPRCs
 Management and Supervision of OPRCs

 Capacity
 Understanding of OPRC concept
 Change of attitudes
 Additional skills
 Training and coaching

41
 Role and Capacity of Contractors

 Role
 Long-term road asset management
 Proactive
 Services to the road user
 Capacity
 Understanding of OPRC concept
 Change of attitudes
 New skills
 Lack of sufficiently qualified contractors
 Training and coaching

42
 Role and Capacity of Consultants
 Role
 Promoter
 Designer
 Supervisor / Manager
 Trainer / coach
 Capacity
 Understanding of OPRC concept
 Change of attitudes
 New skills
 Training and coaching
 Lack of sufficiently qualified consultants

43
 Implementation Experiences

44
 New Zealand (1)

 First performance contract covering 406

km of national roads was let for 10 years
in 12/98
 Contract cost was 15% below comparable
cost of traditional contracting
 Performance standards are very well
elaborated
 System of quality control by the
contractor (quality manual, quality plan,
quality system procedures) in place

45
 New Zealand (2)

 In 2000 a similar contract was concluded

 Two years later a third contract covering
1040 km of local roads and 122 km of state
highways
 While the first contract resulted in 15%
savings the latest one came in 22% below
the cost estimate for comparable
conventional contracts
 More than 10% of the national roads are
46
maintained under performance contracts
 First Performance Based Road
Management and Maintenance Contract in
USA, Virginia (Comprehensive Agreement for Interstate
Highway Asset Management Services)

 Maintain and refurbish 1250 lane-miles on

three Interstate Highways, 62 rest areas,
and 7 visitor centres
 5+ year contract since early 1997
 131 million US$ for 5 years with
approximately 16% savings over VDOT
cost
 Contractor is VMS
47
 15% of work is done by VMS staff
 Washington D.C.
Performance-Based Asset Preservation

 pavement (344 lane-miles)

 drainage (2950 catch
basins, 7 miles of ditches)
 roadside and landscape
(450,000’ of curb and
gutter)
 bridges (109 structures)
 tunnels (4 major)
 snow and ice control
 traffic control and safety
(108,270’ guardrail,
48
51 crash attenuators)
Source: FHWA
 Mobile CONVENTIONAL METHOD
Pothole Average Unit Cost:
$120 per patch
Patching $900 per lane mile
$5,900 per ton

* Production =
20-30 patches per day

MOBILE PATCHER
Average Unit Cost:
$22 per patch
$38 per lane mile
$880 per ton

*Production =
49
120 patches per day
Courtesy VMS
 Innovative RoadFlex™
Pothole Patching Material
 Multiple Benefits:
 Permanent patch
material
 No failures in 3 years
 No rework required
 Reduced labor and
lane closures
 Less disruption to
motorists

50
Courtesy VMS
 United Kingdom
Management Agent Contract (MAC)

 MAC combines the Professional Service

Consultant and the Physical Works
Contractor of the Term Maintenance
Contract
 First MAC in 2001 by the Highway Agency
covering routine and winter maintenance
(5+2-year contracts)
 Since 2004 contracts cover all routine
maintenance, winter services, incident
response, resurfacing, and bridge
refurbishment
51
 United Kingdom
Management Agent Contract (MAC)
 Hybrid type contract
 Self-certification of compliance with serve
levels by contractor
 Audit by client
 No payment deductions for
underperformance
 Continued underperformance leads to
early termination of contract
 Requires partnering culture
 Quality and price submissions weight
80:20 (first MAC)
52
 United Kingdom
Management Agent Contract (MAC)

Performance objectives
 Improve road user safety
 Improve road worker safety
 Maintain network in safe and serviceable
condition
 Reduce congestion
 Increase availability of network
 Improve management of incidents
 Deliver improvements to journey times
 Deliver high level of road user satisfaction
 Improve efficiency and continual improvement
53
 Manage contract effectively
 Respect the environment
 United Kingdom
Management Agent Contract (MAC)

Almost all maintenance works of the

motorways and trunk roads are
maintained by MAC
Average cost per lane km was 25000
British Pounds in 2002/3 at 2008/9
prices
Highly sophisticated contract

54
 Finland

 1998 first 3-year area maintenance

contract with some performance elements
 Since 2003 Finnra moved to 3-year, 5-year
and 7-year hybrid contracts for routine
maintenance and winter services
 78% of contracts were won by the Finish
Road Enterprise under competitive
bidding
 Lump-sum payments represent 75-80% of
contract amount
55
 Estonia

 1995 – the Estonian Road Administration (ERA)

launched two pilot performance contracts for
routine road maintenance for national roads
 1995 to 2000 - ERA tested several one-year and
two-year contracts, including winter
maintenance
 Since 2000 several 5-year contracts have been
awarded
 Since 2006 ERA moved to 7-year contracts
 As of 2008 100% of ERA’s road network (16500
km, mainly gravel roads) is maintained under
56
hybrid type performance contracts
 Estonia

Partnership
 ERA and its state agencies have established
strong partnership relations with their
contractors. The Administration arranges bi-
annual workshops to bring together
representatives of the contractors and road
agencies involved in PBC. The main objective
of such events is to share experiences of
different counties, collaboratively discuss
lessons learned and find innovative solutions
for future implementation of PBCs.
57
 Serbia
 Two pilot performance contracts of the
hybrid type (660 km and 517 km) covering
routine maintenance of main and regional
roads, including winter maintenance, were
let in August 2004
 The contract duration was 3 years, with a
two-year extension option, when the
contractor performs well and is interested
in continuing
 Supervision of the contractors is done by
a local consulting firm
58  World Bank financed
 Serbia
 Procurement was done through
international competitive bidding (1
international contractor, 5 domestic (including 3 local)
contractors)
 The international contractor was winning
the contract
 Average cost was USD 3600 per km and
year (2006)

59
 Serbia
 Performance-based items
 Cleaning of pavement, shoulders, drainage
system and traffic signs
 Vegetation control
 Removal of loose rocks secured by wire mesh
 Maintenance of retaining walls
 Minor repairs of uneven unpaved shoulders
 Winter maintenance
 Unit price items
 All other maintenance activities (repair of
pavement, shoulders, embankment, slopes,
wire mesh, drainage system, retaining walls,
60 guardrails, traffic signals, road markings, etc.)
61
 Serbia - Achievements

 Significant improvement in condition of all

road elements in comparison to the
previous period
 Significant savings of funds and reduction
in materials consumption for winter
maintenance in comparison to the
previous way of maintaining
 Significant savings for the items
contracted in accordance with the
performance-based principle

62
 Savings for Winter Services

UNIT SALT AND AGREGATE CONSUMPTION (WINTER SEASON 2005/2006)

30

t/km
24.31
25

20

15

10 8.14
6.15
5.25
5

0
Unit Salt Consumption (t/km) Unit Aggregate Consumption (t/km)
Pilot Project 5.25 6.15
Central Serbia 8.14 24.31

UNIT COST OF WINTER MAINTENANCE (WINTER SEASON 2005/2006)

1,600 1,518.66

1,400
1,200
euro/km

1,000 892.94
800
600
400
200
0
Unit Cost of Winter Maintenance (€/km)
Pilot Project 892.94
63 Central Serbia 1,518.66
 Examples of good practice

Cutting, Grubbing and Clearing of Road Reserve Vegetation

and B.2.1 Maintenance of unlined side drains

BEFORE AFTER

64
Source: Highway Institute, Serbia
 Examples of good practice

Maintenance of Circular Culverts

BEFORE AFTER

65
Source: Highway Institute, Serbia
 Examples of good practice

Maintenance of unlined side drains and B.4.1

Maintenance of shoulders

BEFORE AFTER

66
Source: Highway Institute, Serbia
 Croatia

 All road maintenance works are

contracted to private contractors
 Limited competition
 Existing traditional contracts are
expensive
 Not sufficient funds for rehabilitation and
periodic maintenance
 Proposed pilot OPRC in the Istria Region
 Hybrid type 4-year contract for about 290
km of national and regional roads
67
 Croatia
 OPRC sample bidding document of the
WB has been used
 Routine maintenance and winter services
mainly paid on performance and mayor
repairs and periodic maintenance to be
paid on unit price and re-measured basis
 Pavements in poor condition continue to
be paid on unit price and re-measured
basis
 Financing through regular budget
 Limited budget which has been reduced
68
further in recent times
 Ongoing
rehabilitation
good
fair
69 bad
Cracks and cracked areas
 Croatia- Inspection System

 Contractor self-evaluates compliance with

service levels and enters data real-time
into an online data bank
 Road agency makes random checks if
data have been entered correctly
 Non-compliances detected by road agency
that have not been entered into the system
will result in penalties
 Incorrect data supplied by contractor will
result in severe penalties
70
 Ukraine
 Road Maintenance almost exclusively
done through state owned company at
fixed unit prices
 Proposed pilot OPRC on the M06 from
Brody to the Chop (border) financed by
EBRD
 2 hybrid type 5-year contracts, one for 129
km and the other one for 268 km
 Contract based on OPRC sample bidding
documents of the WB
 Scope: Improvements, rehabilitation,
71 routine maintenance and winter services
 Brody

Chop
 Brody Border

New construction 11/2011

 Ukraine
 Improvements, rehabilitation, mayor
repairs and emergency works paid on re-
measured basis
 Tender to be launched soon
 EOI showed limited interest by qualified
contractors
 Two stage tender

74
 Implementation Experiences
Worldwide
 Highly positive in developed countries
 Mainly positive in developing countries with few
teething problems
 Progress depends on the attitude of the road
administration, the ability of consultants and
contractors to implement OPRC as well as the
political backing of OPRC
 Substantial cost reductions have been realized
 Road conditions have improved
 OPRC supports efforts of a long-term financing
of road maintenance
75
 Lessons Learned (1)

 Pilot projects are the best way to

implement performance contracts
 Performance Contracts have to be tailored
to each specific situation
 Preferably roads should be in
“maintainable” conditions
 Qualification of contractors and
supervisory staff of the client is key to
success
 Risks shall be assigned to the party that
76 can best bear and manage the risk
 Lessons Learned (2)

Additional lessons learned in developing

countries
 Project preparations requires consultants
which have experiences in implementing
OPRCs in similar environments
 Mix of unit price items and performance items
 Monitoring system
 Penalty system
 Involve potential contractors in design of
bidding documents

77
 Lessons Learned (3)

Additional lessons learned in developing

countries (2)
 Training and coaching of client and
contractors during the initial
implementation phase helps to adjust to
the new contracting system

78
Strategy for Implementing OPRC
in FUS Countries

79
 Seven Steps for Successfully
Introducing OPRC
1. Awareness building: Information
workshops for road administration, road
users, contractors, consultants and
other interested parties
 Explain concept
 Explain potential benefits
 Show examples from around the world
 Promote discussion

80

Source: Andreas Schliessler, WB

 Seven Steps for Successfully
Introducing OPRC
2. Feasibility Study
 Review of current road maintenance
procedures
 Assess implementation / contract
management capacity of client,
consultants and contractors
 Design of feasible implementation
strategy

81
 Seven Steps for Successfully
Introducing OPRC
3. Technical studies to be carried out by
qualified consultants to:
 Select candidate roads
 Determine scope of services
 Carry out detailed technical evaluation
 Determine mix of re-measurable and
performance based items
 Determine adequate service levels
 Estimate like costs (benchmark costs)
 Determine financing and
82
implementation arrangements
 Seven Steps for Successfully
Introducing OPRC
4. Prequalification of contractors
 Determine prequalification criteria
 Organize workshop for potential
bidders
 Carry out prequalification process

83
 Seven Steps for Successfully
Introducing OPRC
5. Bidding process
 Prepare and launch bidding
documents
 Organize pre-bid seminar (s) for
prequalified bidders
 Answer queries / issue addendum
 Carry out bid evaluation
 Award contract

84
 Seven Steps for Successfully
Introducing OPRC
6. Supervision arrangements
 Determine adequate supervision
arrangements
 Prepare TOR for supervision
consultant
 Prepare supervision manual

85
 Seven Steps for Successfully
Introducing OPRC
7. Facilitation during pilot contracts
 Prepare TOR for facilitator / trainer
 Select and contract facilitator / trainer
 Facilitator to conduct regular training
and coaching of road agency,
contractor, supervision consultant
 Systematic monitoring and evaluation
of results and experiences – learning
process
86
 Role of Financing Institutions
 World Bank
 Promoter
 Financing of pilot projects
 Other international development banks
(IDB, ADB, AfDB, CDB, EBRD) have
promoted and financed performance
based road contracts
 Supporting the institutional and financial
reform process

87
 Role of Financing Institutions
 Financing of consulting services:
awareness seminars, training programs,
feasibility studies, contract design and
bidding process, training and coaching
during project implementation
 Financing of works and services of long-
term OPRCs
 Providing payment guarantees to OPRC
contractors

88
 Implementation of OPRC in FSU
Countries
“Ideal” conditions for implementing
OPRCs
 Road agency with good contract management
experience, committed to the OPRC concept
 Well developed contracting environment with
local contractors experienced in road
maintenance
 Financing secured for contract duration
 Network does not need major rehabilitation
 Good knowledge and data of network,
maintenance needs and cost
89
 Implementation of OPRC in FSU
Countries - Problems
 Financial Framework
 Under-financing of road maintenance even
when first generation road funds (dedicated
fuel charges) are in place
 Institutional Framework
 Reform process of road sector in FUS is at
different stages and sometimes not yet
conducive for the implementation of OPRCs
 Often insufficient capacity of local private road
maintenance contractors
 Road conditions
 Deteriorating
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 Increased road rehabilitation requirements
 Implementation of OPRC in FSU
Countries - Problems
 Consulting Industry
 Insufficient qualified local consultants
 Lack of qualified international consultants
familiar with OPRCs and their adaptation to
specific local conditions in FUS countries

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 Implementation of OPRC in FSU
Countries by EBRD
 Recommendations (1)
 Follow the seven steps
 Select international consultants with relevant
experiences in implementing OPRC
 Consider hybrid type contracts that are in
line with the capacity of potential contractors
 If initial rehabilitation or improvement works
are included, contract duration shall reflect
the lifetime of such works
 If substantial initial works are required make
sure that the contractor stays interested not
92 to terminate the contract prematurely
 Implementation of OPRC in FUS
Countries by EBRD
 Recommendations (2)
 The longer the contract duration the more
freedom shall be given to the contractor to
choose his own work methods
 Preferably local contractors shall benefit
 Preferably the Sample Bidding Document for
Procurement of Works and Services under
Output- and Performance-Based Road
Contracts (World Bank 2006) shall be used
 Prequalification of contractors shall be
based on the specific requirements for
OPRCs
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 Implementation of OPRC in FSU
Countries by EBRD
 Recommendations (3)
 Try not to be over-ambishous and expect to
much too fast

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Thank you for your attention

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