Embracing complexity in performance-based contracts for road maintenance

Abstract

Purpose – An important feature in managing road infrastructures is the growing use of performance-based contracts (PBCs) in the delivery of maintenance. The expectations are high. But there are also risks connected to PBC. The main question for road agencies is: how to achieve as much as possible of the expected advantages while limiting the possible disadvantages? The purpose of this paper is to answer that question and explore how PBC of maintenance can be improved. Design/methodology/approach – Based on theoretical constructs this paper investigates the strategies of the English Highways Agency and the Dutch Rijkswaterstaat, when outsourcing the maintenance of their existing road infrastructures and the effects of their strategies. Findings – The paper finds that road agencies should focus on the process of interaction of the main actors involved, rather than the performance measurement systems (PMS) itself. The agencies should adjust their governance to the degree of uncertainty. PBC requires an informed and knowledgeable principal. Research limitations/implications – The in-depth study is limited to two road agencies. More systematic research is needed in linking theoretical constructs with empirical evidence from more road agencies. The method applied in this paper can be used for further research. Practical implications – The lessons drawn from the case studies offer potential benefits to other road authorities that use or consider PBC as their method of delivery of maintenance. Originality/value – Where only few empirical studies have investigated in detail the actual achievements of PBC in road maintenance, this empirical research aims to fill that gap.