If the performance does not meet the requirements during the warranty / maintenance period, the contractor has to replace the work with new work to the original requirements, has to pay for extra traffic control, pays a penalty and loses right to bonuses. At the end of the warranty / maintenance period the performance is assessed to determine if the contractor is entitled to a bonus or should pay a penalty. Performance properties are similar to those during the warranty period, but the criteria are higher. Design & Construct contracts The contractor has design responsibility, is used for new design, reconstruction, road widening etc. The projects usually have a 7 to 10 year warranty period. Wearing course performance is assessed the same way as for E&C contracts. For bridges and pavement structures when the warranty period of 7 to 10 years is insufficient, the construction performance is covered by design verification. Design Build Finance & Maintain contracts The contractor has design responsibility, and is responsible for the maintenance for 20 to 30 years transferring a large portion of the performance risk onto the contractor. The contractor is paid on the basis of availability through a periodic fee”. The contractor also receives “availability payments on the provision of new, or improvement of existing infrastructure (tunnels, bridges, roads, etc.) The net availability fee consists of a gross availability fee minus corrections for availability and minus any performance penalty. The gross availability fee is a periodic payment with an annually indexed value. Reductions in the availability fee are determined by every 15 minute period that a lane is below the performance requirements or is unavailable due to work by the contractor (excluding accidents and events out of the influence of the contractor). The reductions are higher per time unit in the day than in the night. A bonus is paid if no penalty points are give in two successive assessment periods. Payment is provided for new works and improvements to existing infrastructure within the contract, based on a list of required and existing infrastructure needs. Output specifications are set for the infrastructure along the lines of a D&C contract but with fewer aspects included. One DBFM contract is operating, three are commencing, two are out to tender and three are being prepared. Summary and recommendations In the European construction sector the procurements systems are of similar complexity to Australia.
If the performance does not meet the requirements during the warranty / maintenance period, the contractor has to replace the work with new work to the original requirements, has to pay for extra traffic control, pays a penalty and loses right to bonuses. At the end of the warranty / maintenance period the performance is assessed to determine if the contractor is entitled to a bonus or should pay a penalty. Performance properties are similar to those during the warranty period, but the criteria are higher. Design & Construct contracts The contractor has design responsibility, is used for new design, reconstruction, road widening etc. The projects usually have a 7 to 10 year warranty period. Wearing course performance is assessed the same way as for E&C contracts. For bridges and pavement structures when the warranty period of 7 to 10 years is insufficient, the construction performance is covered by design verification. Design Build Finance & Maintain contracts The contractor has design responsibility, and is responsible for the maintenance for 20 to 30 years transferring a large portion of the performance risk onto the contractor. The contractor is paid on the basis of availability through a periodic “availability fee”. The contractor also receives payments on the provision of new, or improvement of existing infrastructure (tunnels, bridges, roads, etc.) The net availability fee consists of a gross availability fee minus corrections for availability and minus any performance penalty. The gross availability fee is a periodic payment with an annually indexed value. Reductions in the availability fee are determined by every 15 minute period that a lane is below the performance requirements or is unavailable due to work by the contractor (excluding accidents and events out of the influence of the contractor). The reductions are higher per time unit in the day than in the night. A bonus is paid if no penalty points are give in two successive assessment periods. Payment is provided for new works and improvements to existing infrastructure within the contract, based on a list of required and existing infrastructure needs. Output specifications are set for the infrastructure along the lines of a D&C contract but with fewer aspects included. One DBFM contract is operating, three are commencing, two are out to tender and three are being prepared. Summary and recommendations In the European construction sector the procurements systems are of similar complexity to Australia.
2012_AAPA_Study_Tour_Report_v3.docx