The dynamics of outsourcing maintenance of civil infrastructures in performance-based contracts

Abstract

An important feature in managing civil infrastructures is the growing use of outsourcing in the delivery of maintenance. Evidence of this is shown in a strong increase in the application of performance-based contracts. The expectations of the principals are high: a smaller organization, better service, lower costs, more innovation, and more flexibility. But there are also risks connected to performance-based outsourcing of maintenance: the use of the wrong performance requirements, strategic behavior of the contractor, and a lack of knowledge and experience of the principal. The main question for the authorities that want to outsource their maintenance is: how do we achieve as much as possible of the expected advantages while limiting the possible disadvantages to a minimum? Based on case study and theoretical exploration this paper answers that question by investigating the strategies that the English Highways Agency and the Dutch Rijkswaterstaat use, when outsourcing the maintenance of their existing road infrastructures and what the effects of their strategies are. Lessons are drawn from the case studies and they are of most interest to other road authorities that consider, or already have chosen, outsourcing the delivery of maintenance as the way forward.