Performance-Based Contracting for Roadway Maintenance Operations in Indiana

INDOT initiated a study to investigate Performance Based Contracting of maintenance operations. One of the main impetus for the study is that INDOT started a ten year road building program called Major Moves that will add over 1900 lane miles to the current network. With this addition and coupled with a trend of reduction in maintenance personnel, INDOT is planning how maintenance will be performed. One viable option is the use of performance based contracting (PBC). This study has evaluated many aspects of PBC and the current INDOT maintenance program. PBC is being used extensively in some states while other states have tried and backed away for various reasons which are explained in the report. Due to higher costs experienced with PBC and the fact that long term contracts lock in prices leaving agencies with no flexibility to reduce during economic downturns; the report is not recommending PBC to INDOT. What is recommended is that INDOT should: establish a LOS program; develop and test snow and ice removal subcontracts; and further develop a hybrid maintenance program where private contracts are used to supplement INDOT maintenance force.