Highway Maintenance Contracting in Ontario

1. Highway MaintenanceContracting in Ontario Presentation to Northeast Association of State Transportation Officials (NASTO) Ministry of Transportation of Ontario Phil Hutton

2. Topics • Ontario and Provincial Highway Network • Highway Maintenance Delivery • Area Maintenance Contract Model • Administration and Oversight • Successes, Challenges and Lessons Learned

3. Ontario • An area of 1,076,395 km2. Population over 13.2 million • More than 90 per cent of residents within 10 km of a provincial highway. • Over 432,000 vehicles use Highway 401 near Highway 400 every day, making it the busiest highway in North America. • Highway Network • 40,000 lane-km of provincial highway. 16,500 centre-line km • Over 2,800 bridges/structures. • 29 remote airports and 8 ferry services • Carry about $3 billion of goods every day. $600M cross border every day. • $59 billion dollar replacement value • Spend $2.0B annually for construction and rehabilitation • Approximately $275 million annually on winter and summer maintenance • Ontario highways are the safest in North America • Maintaining safe roads and keeping traffic moving are key economic and social goals of the Ministry

4. Highway Maintenance Delivery Pre-1995 • Large staff for in-house delivery of work • Approximately half of winter maintenance work outsourced under direct ministry supervision • 1996 business plan to fully outsource by 1999 1996 to 2009 • A blend of contract types • Area Maintenance Contracts (AMC’s) – lump sum, contractor provides services including planning and scheduling maintenance activities • Managed Outsourcing contracts (MO’s), unit price based contracts with ministry directing maintenance activities • Savings/value for money achieved (~12.5% - Deloitte) • Ministry ensures maintenance quality standards are achieved Current Service Delivery Approach • Shift to 100% AMC model

5. Area Maintenance Contract Model (2009-2026) • Integrated scope and services to promote asset management approach • Highway Maintenance • Summer and winter maintenance • Condition reports • Low-complexity Capital • Quantities and prices set by item • Data Collection • Facilities, culvert inventory and condition, some pavement distresses • Promote development of asset management competencies by industry • Contractor responsible for determining how to do the work and achieve the required performance outcome or result; opportunity to innovate • Contractor develops capital plan using reports, data, maintenance experience and set items • Contractor plans, ministry modifies/approves, contractor delivers • Reports used for ministry analysis, needs identification and feeding into plans

6. Performance - Overview • Outcome targets set to achieve ministry quality standards • Promote highway safety • Maintain and preserve the infrastructure • Measurable requirements • Support ministry business practices • Implemented for all service areas, e.g. • Winter maintenance • Pavement maintenance • Roadside features • Based on: • Ministry Maintenance Quality Standards and Best Practices • Ontario Provincial Standards

7. Performance Requirements - Example Vegetation Control • Method-Based • When vegetation within 2m of any shoulder edge reaches 500mm in height, it shall be mowed and trimmed to a height of 200mm for one (1) mowing swath from the edge of shoulder within 21 days. • Outcome-Based • Vegetation within 2m of any shoulder edge not longer than 60cm.

8. Quality Contract requires ISO Certification • Quality Management (ISO 9001:2008) • Environment (14001:2004) • Registration within 6-months of contract start and maintained throughout • Contractor develops, documents and registers how they will achieve outcome targets, identify root causes and ensure corrective action • Key step to ensure contractors are responsible for managing their performance and delivering contract requirements • ISO requires annual audits • Results of external and internal audits available to ministry

9. Current Implementation Status • Six contracts implemented between 2009 and 2011 • Seven new AMCs start in 2012, making it the biggest year for contract start dates. • By Oct 1, 2012, 13 of 21 areas will be performance AMC • In 2013, five contracts start, leaving two areas in 2014 to complete the implementation of the contract model. • Advertising a new contract about every 90 days

10. Contract Administration/Oversight • Ministry staff are responsible to ensure the contractor meets their contractual obligations • Hands-on training to ministry staff in advance of contract start • Oversight Manual applied Province-wide • Utilize various tools/sources of information: Documentation review, GPS-based monitoring systems, field inspections • Focus on results, not methods • Audit, sampling-based • Administer payment and adjustments • Maintenance and data collection – lump sum price • Capital – set annual quantity and price • Change Orders used to vary amounts or work

11. Outsourcing to-date - Summary • Strong private sector competition • Healthy contracting industry • Approx 5 bids per AMC • Five large contractors operating in Ontario • Bids received from Ontario’s existing industry base as well as proponents new to Ontario • Growing contractor experience • Competitive and comparable bids • Prices often within 10% of each other • Opportunities for Innovation • Good overall contractor performance

12. Weekday Detroit-Windsor Cross-Border Commercial Flows, 2000 US to Canada flows have similar characteristics Windsor – Detroit River Crossing

13. Summary • Philosophy/Concepts in summary • The Work is the same, more efficient, timely and flexible • Service provider is accountable • How the Work is measured changes • Results vs. Methods • Strong and competitive contracting industry • Audit and sampling-based oversight • Maintained maintenance standards for traveling public • Safest roads in North America