6 TH ANNUAL CONFERENCE

1. 6THANNUAL CONFERENCE

2. performance-based Maintenance approach DB/P3 Edward P. Pensock, Jr. P.E. Strategic Project Division Director Texas Department of Transportation

3. Design-Build vs. CDA Contracts Design-Build CDA • Does not include private financing • Not a prescriptive design • Innovation by the Developer • Review at project level as packages are released • Coordination with FHWA as needed • May include optional Capital Maintenance Agreement • Limited to 3 projects per fiscal year approved by Commission • Construction must be estimated at $50 million or more • Similar to D-B, but may be done as: • Toll Concession • Design-Build Finance(f) • Design-Build-Operate-Maintain • Design-Build-Maintain • Design-Build • Use of independent engineer • More risk transfer than D-B • May include private financing • Limited to specific projects identified in Senate Bill 1730 11

4. TxDOT Business Programs • Delivery Methods: Risk Allocation Assignments1 1 Actual risk assignments may vary by project 2 Eminent Domain delays retained by the owner

5. DB/P3 Maintenance Contracts • Developer responsible for design, construction, operations, maintenance and handback • Long term 15-25 years Mandatory O&M Period • 5 to15 year O&M Performance Requirements may apply to a DB + CMA

6. Performance-Based Approach Compensation to TxDOT resulting from Maintenance Contractor’s failure to meet the performance requirements. • Technical Provisions TxDOT defines desired project outcome in the technical requirements General Maintenance Obligations Maintenance Management Plan (Reviewed and Approved by TxDOT) • Performance requirements, • Measurement procedures, • Threshold values at which maintenance is required, • Inspection procedures and frequencies, and • Subsequent maintenance to address noted deficiencies, • Impacts to Related Transportation Facilities

7. Maintenance Agreements • Non-Compliance Events • D&C Work • O&M Work • Non-Compliance Points • Payment Deductions • Increased oversight if triggers are exceeded • Warning notice of default if points accumulate and exceed threshold • Liquidated Damages • Unplanned lane closures • Safety defect not repaired • Comprehensive Maintenance Agreements and Capital Maintenance Agreements • Option for maintenance agreements if pricing acceptable • Achieves price certainty • Efficient for projects with unique features • Beneficial to achieving long-term ownership of design by the developer • Non-compliance handled through Non-compliance Points or Liquidated Damages

8. O&M Agreements Examples Concession(50 year term of contract): SH 130 Segments 5 & 6 North Tarrant Expressway Segments 1 & 2 I-635 LBJ Freeway Design/Build(three-5 year Capital Maintenance Agreements): SH 130 Segments 1 - 4 DFW Connector Dallas Dallas Horseshoe SH 99 (Grand Parkway) Segments F1, F2, and G IH 35E Managed Lanes Project Loop 1604 Western Extension

9. O&M Agreements Examples • Design-Build – Extended Comprehensive Maintenance Agreements (COMA) • SH 183 Managed Lanes – • 25 year maintenance responsibility (also includes five year extended construction financing) • Loop 375 Border Highway West – • 15 year maintenance responsibility

10. Questions? Edward P. Pensock, Jr., P.E. Strategic Projects Division Texas Department of Transportation Office: 512-936-0903 E-Mail: Ed.Pensock@txdot.gov

11. 6THANNUAL CONFERENCE

12. Key Considerations in TxDOT’sTotal Maintenance Specification John Roberts TxDOT Maintenance Division Performance-Based Contracts

13. Key Considerations • Internal Input • Industry Input • Effect Measures of Performance

14. Internal Input • Meeting with internal personnel to develop expectations of performance that are realistic/desired. • Evaluate input to provide consistency of expectations statewide. Goal = buy-in

15. INDUSTRY INPUT • Are our expectations realistic? • Bring good ideas for better execution. • Have we provided clear communication of expectations? Goal = decrease risk during execution

16. Effect Measures of Performance • Condition Assessment • Key Performance Indicators (KPI) • Payment Reduction Strategy Goal = Perform. Get Paid Don’t Perform. Don’t Get Paid

17. What are the results?

18. What are the results? • Failure to submit the initial Quality Management Plan within the first 60 days = 5% reduction in payment the 1stmonth & then a 10 % reduction in payment thereafter. • Failure to submit the Safety Plan within the first 30 days = 5%percent reduction in payment in the 1stmonth & a 10% reduction in payment each month thereafter. • Others

19. Example kpis

20. KPI Payment methodology # of Meeting Requirements/Total # of Occurrences = % Compliance

21. Questions John A. Roberts, P.E. (512) 416-3083 John.Roberts@txdot.gov