Final Report On OPRC Format

PUNJAB STATE ROAD SECTOR PROJECT
CONSULTANCY SERVICES AND PROJECT

PREPARATORY STUDIES FOR PACKAGE II
(PHASE II)
Draft Final Report on Contract Format for
Output and Performance Based Contracts for
Roads.
PUNJAB STATE ROAD SECTOR

PROJECT LOAN # 4843-IN
Consultancy Services and Project Preparatory Studies for
Package II (Phase II)
Draft Final Report on Contract Format for Output and
Performance Based Contracts for Roads.
Terms of Reference Task A6: Development of Contract Format
Released By
Prepared By
Opus International Consultants Limited
Robert Fergerstrom
Team Leader
Napier Office
215 Hastings Street
Private Bag 6019
Rowan Kyle
Supporting Procurement Specialist
Napier, New Zealand
Reviewed By
Tony Porter
Highway Specialist
Opus International Consultants Limited 2008
Telephone:
+64 6 833 5100
Facsimile:
+64 6 835 0881
Date:
Reference:
Status:
December 08
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Final V.3
Punjab State Road Project: Final Report on Contract Format
Contents
1
Executive Summary ............................................................................................................. 1

1.1 Introduction ................................................................................................................... 1
1.2 Assets to be Included ................................................................................................... 1
1.3 End of Contract Residual Road Condition .................................................................... 1
1.4 Recommended Procedure for Joint Inspections Prior to Network Hand Back ............... 2
1.5 Financial Arrangements for Performance Guarantees .................................................. 3
1.6 Compliance Framework ................................................................................................ 4
1.7 Tender Evaluation Procedures ..................................................................................... 6
Introduction.......................................................................................................................... 7
2.1 Summary Discussion on Contractor Capacity ............................................................... 7
Extent of Assets to be Maintained. ..................................................................................... 9

3.1 Summary of Assets Recommended to be Maintained within the OPRC Pilot. ............ 11
End of Contract Residual Road Condition ....................................................................... 25

4.1 Introduction ................................................................................................................. 25
4.2 Residual Life for Non Pavement Assets...................................................................... 28
Recommended Procedure for Joint Inspections Prior to Network Hand Back. ............ 29
5.1 Proposed Procedure ................................................................................................... 29
Financial Arrangements for Performance Guarantees ................................................... 31

6.1 Background and Options ............................................................................................ 31
6.2 Other Performance Guarantees ................................................................................. 33
6.3 General....................................................................................................................... 33
Compliance Framework .................................................................................................... 34

7.1 Contract Management Board ...................................................................................... 35
7.2 Payment Penalties for Durability, Road User Service and Comfort and Management
Performance Measure Non-Conformance .................................................................. 36
7.3 Liquidated Damages for Late Completion of Defined Separable Portions................... 41
7.4 Transfer of Work between Adjacent Contracts ........................................................... 41
7.5 Regular Contractor Performance Evaluation .............................................................. 42
The Tender Evaluation Procedures .................................................................................. 44

8.1 Contractor Prequalification ......................................................................................... 44
8.2 Proposed Tender Evaluation Procedure ..................................................................... 46
Contract Duration .............................................................................................................. 51
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10
Payment for Planned Upgradation Works........................................................................ 52
11
Contract Format Related Issues to be Confirmed ........................................................... 53
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ii
Executive Summary
1.1
Introduction
1.2
1.3
(i)
The World Bank Sample Bidding Documents will provide only a basis for the final contract
structure however it is anticipated that a number of amendments will be necessary to
reflect both the specific and unique needs of this pilot and to incorporate the
recommendations of this report.
(ii)
The reviews of Contractor Capacity undertaken under Task A4 indicate that the
Contracting Industry within the State and nationally has the capabilities to undertake the
scope of work required.
Assets to be Included
(iii)
It is recommended that the majority of the assets within the road RoW and administered
by the PRBDB, the PWD and the Forest Department are included in the pilot OPRC, with
the only exclusions being the structural repairs to bridges, large culverts or retaining
structures and the maintenance of traffic lights and street lights.
(iv)
The policy for the maintenance of network sections that are currently under construction
or maintenance through the PMGSY or NABARD schemes requires further consideration
from both an administrational and legal perspective. However handing over the
maintenance of these sections of the network to the OPRC contractor at the
commencement of the OPRC pilot or as soon as current construction work has been
completed is considered to be preferred option.
(v)
Where existing asset inventories are incomplete, the OPRC Contractor will be required to
record and update the existing inventory or populate a new inventory (where none exists)
and submit this information to the Client within a reasonable time frame from the
commencement of the contract. On-going auditing of the accuracy and completeness of
this data is strongly recommended.
(vi)
The verification of all existing inventory data and the collection of new inventory data in
the field should be linked to GPS coordinates at the time of data collection.
End of Contract Residual Road Condition

(vii)
All of the current Output and Performance based Road Contracts (OPRC) that Opus
2
International Group are aware of have specified minimum annual quantities (m ) of
pavement rehabilitation and surfacing renewal as the basis for managing the risk of
unintended pavement asset consumption. This concept is also provided for within the
World Banks Sample Bidding Documents for OPRC.
(viii)
While further international research into alternative ways of measuring and managing this
risk will be on-going, there is presently still insufficient confidence over the use of
condition measures or pavement strength assessment tools to allow us to recommend
them as the only mechanism for ensuring unintended consumption has not occurred.
i. It is therefore recommended that both field observations and HDM modelling outputs
2
be used to determine a minimum annual quantity (m ) of surfacing renewal and
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pavement rehabilitation that will be specified in the Contract documents to be
undertaken by the Contractor. It will remain the responsibility of the Contractor to
identify the location of this work along with the detail of the proposed design.
ii. In addition it is also recommended that a mechanism is developed that will permit
substitution between surfacing renewal and rehabilitation quantities to be agreed by
the CMB. This would account for the level of variability that is likely to occur between
years, or where there is a reduction in the need for the specified annual quantities as
a result of better than expected performance delivered from the OPRC Contractors
pavement and surfacing treatments. However any substitution will be limited to a
percentage (e.g. 10%) of the specified annual quantities and will need to be fully
justified by the Contractor before being submitted for approval.
1.4
(ix)
It is recommended that a Client funded programme of network wide pavement deflection

testing utilising a Falling Weight Deflectometer is undertaken at an appropriate frequency
and that through analysis of this information over time, network specific calibration factors
determined so that this approach can be used in the future to monitor pavement
consumption.
(x)
It is recommended that an acceptable distribution of pavement deflection values to be

achieved through post construction testing on all rehabilitation and upgradation works be
developed. This will assist in encouraging the Contractor to apply adequate Quality
Control in all pavement construction works which will give greater confidence that the
expected design life of the rehabilitated pavements has actually been achieved. To
calibrate the test results it is recommended that previously re-constructed pavements
using verified construction practices and materials be tested and the distribution of
deflection results correlated with expected pavement design lives. Because the testing
results can be influenced by both the time between construction and testing as well as
antecedent weather conditions, it will be necessary to plan the post construction testing
well in advance in an effort to mitigate these effects on the overall results.
(xi)
The application of Durability Performance Measures and Road User Service and Comfort
Measures can be expected to control pavement repair and construction workmanship
issues.
Recommended Procedure for Joint Inspections Prior to Network Hand Back

(xii)
The requirement for the Contractor to develop and operate a defects recording system is
to be monitored by the Client through regular joint inspections.
(xiii)
This list is to form the basis of formal inspections of the network and the identification of
any uncompleted work at 1 year and at 6 months from the due date for the end of the
contract. In addition a further joint inspection is recommended at 2 months from the expiry
of the maintenance defects period.
(xiv)
We will ensure the contract documents also require the Client and the outgoing and
incoming Contractors to complete a joint inspection within two weeks of taking possession
of the network. This requirement will then avoid the potential for a dispute between the
new Contractor and Client over the quality of repairs and/or condition of the network
presented by the out-going Contractor.
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1.5
Financial Arrangements for Performance Guarantees

(xv)
The preferred alternative would be for the Contractor to obtain a Performance Guarantee
(Performance Bond) to a value that would provide the same level of security to the Client
as retentions would but with a reduced potential for financial hardship and
administrational complexity than that associated with retentions. This performance
guarantee would have three components:
i. Construction Guarantee:
This bond needs to cover the estimated value of all of the planned upgradation works
during the term of the OPRC pilot. It is recommended that 50% of the bond is
released following completion of all of the planned upgradation works and the
balance upon acceptance of all post construction inspection and subsequent
pavement deflection testing.
ii. Operation and Maintenance Guarantee:
This bond needs to cover the risk of inadequate maintenance or re-work arising from
poor pavement rehabilitation construction or maintenance activities. The value of this
guarantee would be expected to be to the same value as the estimated aggregated
sum of the retentions plus another 10% to allow for the risk associated with a fixed
value based upon the contract estimate rather than on a percentage of actual physical
works claims which may include the value of any additional services. However it is
recommended that this value be reviewed on a 2 yearly basis and if necessary the
value amended in line with the actual contract value and to ensure its value is
sufficient to cover the full cost of repairing any defective workmanship and backlog of
uncompleted maintenance. This bond would be released at the end of the contract
term.
iii. Pre-transfer Guarantee:
This bond would need to be provided by the OPRC Contractor at 3 years from the end
of the contract duration and must remain valid for 2 years after the end of the
contract. This bond is to ensure that the Contractor complies with his obligation to
carry out the required level of maintenance right through to the end of the full contract
term. It should be for an amount equivalent to the average annual cost of the
maintenance activities (including pavement rehabilitation) completed over the
previous 7 years. This bond would be called in by the Client in the event that the
average number of Durability and Road User and Comfort Performance Measure
Non-conformances over the last 3 years of the contract exceeded the average annual
number of non-conformances for the previous 7 years by more than 5%.
(xvi)
Interviews held with Contractors during the preparation of the report on Contractor
Capacity under Task A4 indicated that the Contracting Industry was familiar with the use
of Performance Bonds and they did not foresee any problems with the application of this
to the OPRC pilot format.
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1.6
Compliance Framework
(xvii) It is recommended that a Contract Management Board (CMB) comprising an Executive
committee of senior management personnel from both the Contractors and Client
organisation is established. This Board would meet at regular (at least 6 monthly)
intervals to review performance, and who would have the authority to agree necessary
actions to address any issues threatening the successful outcome of the OPRC pilot.
(xviii) To facilitate and maximise the involvement of the communities being served by the OPRC
network, it is recommended that CMB be responsible for developing a communication
strategy for consulting with the heads of the village or townships (Sapanch) within the
OPRC network on a regular basis. This would then provide a forum for specific concerns
relating to the way the network was being operated and maintained to be raised and if
necessary addressed by the Contractor.
(xix)
It is proposed that the contract performance system is divided into three key groups being
Management Performance Measures, Road User Service and Comfort Performance
Measurers and Durability Performance Measures.
(xx)
To provide an appropriate level of tolerance to the Contractor failing to achieve full

compliance at all times that a bucket system of allowing a prescribed maximum number
of Non-Conformances (NCs) to be accumulated at any time before payment penalties
are applied.
(xxi)
The following table outlines how the proposed payment adjustment regime will
accumulate points based upon the NCs recorded and how these will then result in the
applied payment reductions.
Item
Repeat NonConformance
Report
Failure to
identify and
record defects
Road User
Service and
Comfort
Performance
Measures
breached
Durability
Performance
Measures
breached
Standard
NC Multiplication Factor
Weighting
Sub-weighting
Consecutive
nonConformance Reports relating
to the same occurrence in a
rolling 3 month period
Inspection and recording
regimes as set out in the
maintenance specifications
and any amendments agree to
by the CMB
Any one of the RPMs set out
in the maintenance
specifications and any
amendments agree to by the
CMB
Any one of the performance
measures set out in the
by the CMB
1, 2
1,2,3
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No. of Months
Notes
Sub -weighting
increased in the
last year of the
Contract
Sub-weighting
increased
progressively
during the last
year of the
Contract
Sub-weighting
relates to the
number of full
calendar months
DPM is breached.

Item
Standard
Management
Performance
Measures
breached

measures (including safety)
set out in the maintenance
CMB
All other verified

NonConformances
Any other breach of the

specifications or any other
failure to meet contractual
obligations not specifically
covered in the above sections
Aggregate NonConformance
Report Score for
the Month
30 Full Performance Payment is made
No. Weeks
Notes
Sub-weighting
relates to the
number of Weeks
(7 days) the MPM
is breached. Part
weeks would be
countered as a
full week.
31 or more No performance payment is made .
Table 1: Proposed Table of Non-Conformance Scores and Payment Reductions
(xxii)
Given the uncertainty surrounding the sensitivity of this proposed scoring mechanism on
the local network it will be necessary to carry out a series of tests on representative
sections to see how difficult it would be to trigger a payment reduction. The final score
may then need to be adjusted to provide a fair balance between acceptable levels of nonconformance and the Contractors risk.
(xxiii) It is recommended that the PRBDB appoints an independent auditor who would
undertake regular reviews of the Contractors performance and would nominate the
randomly selected sections of the network to be audited by the Contractor. It is
understood that this role will be a requirement of the Consultant yet to be selected
through Part E of the T.O.R.
(xxiv) The Contractor will be required to establish and operate a monthly operational compliance
system using their own auditor, but who is independent from the operational team to
establish conformance with the specified performance measurers and contract outputs.
(xxv) The Client is to be given the ability through the contract to also instigate a Project Audit
Team. The Project Audit Team would typically consist of representatives of the Client
(and Consultant if appointed) and the Contractor. The Project Audit Team would
undertake a joint audit of the network from time to time to gauge how well the OPRC pilot
is meeting the principal objectives and whether there are aspects of the contract that
should be presented to the CMB for consideration.
(xxvi) It is recommended that regular (monthly) assessment of the Contractors performance be
undertaken and scored against predefined and agreed criteria by the Client. The criteria
would be jointly developed between the Contractor and the Client as soon as possible
after the award of the Contract, along with an agreed weighted scoring system. The
achievement of a minimum monthly performance score would then form one of the
MPMs in the Conformance Schedule. This would provide both a formal means of
communication between the Contractor and the Client and an opportunity for the Client to
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raise any concerns or pass on acknowledgment of successful outcomes and
performance.
(xxvii) It is not anticipated that Separable Portions will be necessary within the OPRC contract
nor should Liquidated Damages apply as other mechanisms for encouraging Contractor
compliance are expected to be sufficient. However identified risks associated with the
completion of works under adverse conditions should be highlighted in the Contract
specifications. The exception to this recommendation could be where it was decided to
keep the maintenance of the network sections previously constructed, under either the
PMGSY or NABARD schemes, with the respective Contractors until the end of the
maintenance defects periods. The application of Separable Portions covering the transfer
of this maintenance to the OPRC Contractor may then be more appropriate.
1.7
Tender Evaluation Procedures

(xxviii) It is recommended that, to adequately manage the risk of securing the most suitable
Contractor(s), an Expression of Interest (EOI) be requested from all potential Contractors
and a short list of suitable Tenderers be determined who will then be invited to Tender.
(xxix) To assist with ensuring that a high level of Industry awareness is achieved prior to the
commencement of the final tendering, it is recommended that a comprehensive package
of information be made available to all short listed Contractors who have registered their
interested prior to final tender advertising. This information should include:
maps of the proposed pilot networks, GPS locations, relevant photographs and the
network video taken during the roughness survey
basic schedule descriptions and specifications covering the scope work to be

undertaken
an indicative programme and annual quantities of work
summary draft of the contractual arrangements
proposed payment mechanisms and sample bidding documents
the roles of the various parties
an outline of the tender evaluation criteria and procedures that are proposed.
(xxx) To quantify the value of the quality attributes submitted by the Tenderers to the Client it is
recommended that score applied to each tender by the Tender Evaluation Team (TET) be
separated into Price and a Non-Price (Quality) components. These two components will
be assigned on an agreed weighting, e.g. Price 60%, Non-Price 40% that will provide an
acceptable balance of risk between quality expectations and the price paid.
(xxxi) Clearly identified non-price quality attributes, that the Tenderers must provide (separately
from their Price) for evaluation by the TET, will form a component to the evaluation and
selection process. These attributes would be assigned weightings to reflect the value of
their contribution to the overall non price score.
(xxxii) The scores applied to the non-price attributes from all of the Tenderers submissions
would be used to assign a monetary value or premium that reflects the additional value of
the respective Tenderers quality to the PRBDB and the GoP.
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Introduction
Task A6: Development of contract format in the Terms of Reference of the Punjab State Road
Sector Project Loan # 4843 IN Consultancy Services and Project Preparatory Studies for Package
II (Phase II) requires the Consultant to study and recommend an appropriate format for the Pilot
performance based contracts. The following are considered to be essential elements in the
consideration of the final contract format:
Recognises the current state of the maintenance contracting industry in the Punjab and does
not overstretch their capabilities
Provides an appropriate mix of input, output and outcome components, reflective of the road
sections selected and the assets to be included
Maximises the potential for success, without making the project so easy that no real learning
takes place
Provides as much flexibility as possible to allow the contract to evolve over time in response to
changes and the lessons learnt.
The World Banks sample bidding document Procurement of Works and Services under Output
and Performance Based Road Contracts is expected to provide a basis for structuring the final
contract documents. However we anticipate that there will also be a significant quantity of
amendments and additions to this document that will be necessary to reflect the specific and unique
needs of this pilot and to incorporate the recommended contract format options presented in this
report.
Amendments to the initial Technical proposal submitted by Opus have been indicated under those
sections where these were proposed and agreed to by both parties during the negotiation process.
The overall format of this report has been aligned with the section headings and outputs defined in
the ToR. It is therefore advisable that readers not familiar with this reference the Task description
before reviewing the report further.
2.1
Summary Discussion on Contractor Capacity

The report on Contractor Capacity prepared under Task A4 concluded that the industry had the
capability to undertake the works required for the successful management of an OPRC pilot. As a
result of the interviews held with the individual Contractors and the feedback received during the
first industry workshop it was apparent that
There was already a reasonably well developed awareness over the aspects of performance
based contracts
The industry already had the resources and experience to construct much of the required
pavement and surfacing works to a reasonably good standard (within the context of the current
delivery model)
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The industry understood the risk transfer that was embodied in the OPRC approach and
appeared willing to carry a fair proportion of this
There was strong desire by the Industry to be empowered through the OPRC concept and they
were willing to look for innovations where these could result in better outcomes.
These aspects strongly suggest that the implementation of the OPRC pilot should not have to face
the associated difficulties of having to establish both resource capacity or construction skills while
also having to adjust to the performance based contracting environment.
Consequently there is sufficient confidence to move beyond the basic concepts embodied in the
sample bidding documents in an effort to incorporate some of the more recent performance based
contract developments. The principal aims of introducing these concepts will be to:
Ensure the contracts are well tailored to the unique characteristics of the Indian environment
along with providing a fair basis and price for achieving the desired outcomes
Ensure that there is a fair level of risk transfer, and especially over the aspect of residual road
condition
Manage service level creep thereby avoiding the risk that, over time, the costs become
unaffordable or the service levels begin to be out of context with those in place on other
networks within the State
Maximise the value for money being achieved through the performance based philosophy by
ensuring high compliance achievement and good quality control
Ensure there is sufficient flexibility is built into the contracts to cater for inevitable changes and
refinements that will occur over their duration.
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Extent of Assets to be Maintained.

This report has initially given consideration to the extent of the road network assets that should be
maintained within this contract as required by the following Terms of Reference Section:
Task A6: Extent of the assets, in addition to the pavement, that are to be maintained
24.
Issue to be addressed in the study include the extent of the assets, in addition to the
pavement, that is to be maintained under the contract, for example, in addition to the pavements
should the contract include the management and maintenance of all:
Signage
Delineation
Lighting
Vegetation
Bus/heavy vehicle rest stops
Slopes
Retaining Structures
Drainage Works
Bridge Structure
Road Right of Way (i.e. control and preservation)

The methodology for this is outlined in the Opus Technical submission as follows:
Opus has pioneered the development of OPRC-based contracts, including the provision of
specialist input to World Banks Sample Bidding Documents In addition, Opus has had roles in the
supervision and execution of many forms of term maintenance contract, which has given our key
personnel significant insight into approaches that meet agency expectations but are also highly
deliverable in a practical sense. This makes Opus uniquely qualified to produce documents that fully
reflect the requirements in the Punjab situation. Consideration would also be given to the
requirement for joint PRBDB/Contractor management structures (e.g. performance boards) in the
OPRC document(s) that would provide a governance role and potentially enable a speedy resolution
to any disputes, along with the role of external advisors that may add value over the duration of the
contract.
As required by the TOR, aspects to be covered include:
Signage, delineation, lighting, vegetation, rest areas, slopes, retaining structures, drainage
works, bridges, road right of way
Risk profile issues
Boundary between policing/enforcement and operational requirements
Proposed performance criteria (refer also Task A1)
Long-term asset performance measures
Road User Service and Comfort performance measures
Management performance measures
In addressing these issues, the Opus Team will pay special attention to the following aspects:
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The scope of infrastructure assets that will fall under the OPRC umbrella; selecting the
assets to be managed under a performance-based regime will be a function of:
(i)
the potential benefits of the OPRC approach to the GoP and PRBDB (i.e. as compared with
the resources required to administer such a contract)
(ii)
the industry capacity to maintain the assets
(iii)
what is practically viable in terms of both the OPRC and the remaining network
(iv)
Balancing the level of contractual risk embodied in the contract form at a level that meets the
performance expectations of the PRBDB, whilst acknowledging the learning curve of the
contractor
There were no negotiated amendments to this.

The basis for deciding on whether assets should be included in the OPRC should be made on
following criteria:
The extent of knowledge held about the nature / quantity of the asset
The extent of knowledge held over the condition of the asset and its future maintenance needs
The level of risk associated with the transfer of the maintenance responsibility to the Contractor
(this aspect will considered in more detail within Task A8 report on Risk Allocation)
The ability to specify the nature of the maintenance work required
The ability of the Contracting Industry to manage this risk and to complete the work required.
Within the limitations imposed by the above bullet points, it is none the less desirable to have as
many of the networks assets included as possible. This desire was also stated during the OPRC
1
Consultation Workshop #1 and included in the summary from Groups B and B1. It is considered
that this will:
Maximise the efficiency of the overall management of the network as there are fewer separate
contracts which then have to be administered outside the OPRC, and reduces the number of
obstacles to communication between various parties responsible for their maintenance.
Reduce the potential for conflict between separate Contractors.
Enable an increased level of internal efficiency to be achieved by the Contractor by aligning

inspection and maintenance activities across asset groups.
The above workshop also identified reluctance by the Contracting Industry to carry the responsibility
for managing the Right of Way, as they considered the difficulties in dealing with adjacent
landowners would be too great. None the less it is recommended that the OPRC Contractor does
carry some limited responsibility for ensuring the RoW remains free of obstacles or impediments to
the unrestricted movement of vehicles and pedestrians. To this extent the Contractor should feel
1
OPRC Consultation Workshop # 1 Summary Report
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10

empowered to observe and report back to the Client any potential threats to the future maintenance
of the RoW or to his ability to achieve the prescribed Performance Measures (refer section 7.2)
under the contract.
The identification of respective Sapanch (village heads) and the development of a consultation
strategy with them by the CMB is another effective mechanism through which the Contractor can
communicate concerns and issues that may be adversely impacting upon the way the RoW is being
managed and maintained.
2
The preliminary findings of the legal review have also been captured under the respective sections
of this report.
3.1
Summary of Assets Recommended to be Maintained within the OPRC Pilot.
Asset Type
Data
Confidence
Grading
Pavement and Surfacing

Signage
Delineation
Lighting / Traffic Lights
Vegetation Control
Heavy Vehicle Rest Stops
Slopes and Shoulders
Retaining Structures
Drainage Facilities
Bridge Structures
Guardrails and Pedestrian Barriers
Road RoW
Assessed Level of Risk in

Transferring to the
Contractor
B/C*
D
C
C
C
D**
B*
C
B*
B*
C
C
Include in OPRC Pilot
Medium
Low
Low
High
Medium
Low
Medium
Medium
Medium
Medium
Medium
High
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Only routine maintenance repairs
Yes
Limited level of management
Table 2: Summary of Assets Recommended for Inclusion

* Some inventory information is available for the network sections where these overlap with the 86 road sections included in the Phase I Preliminary Report
** Do not currently exist but areas for parking of Heavy Commercial Vehicles may be able to be established and maintained.
Grade
Label
Description
Accuracy
A
B
C
D
Good
Adequate
Poor
Non Existent
Data based on reliable and verified documents

Data based on some supporting documentation
Data based on limited records or local knowledge
Data based on best guess of experienced person
5%
15%
30%
50%
Table 3: Inventory of Data Confidence Levels.
3.1.1 Pavement and Surfacing

Records of recent pavement and surfacing renewal construction details do exist but may not
cover the full extent of the pilot network area, and therefore it will be necessary for the
Contractor to make a visual assessment of the nature of the existing surfacing material
along with the condition of both the surface and underlying pavement during the tendering
phase.
Refer attached Draft Preliminary Report on Legal Issues Raised on the Procurement of Works under OPRC.
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11

The risk to the Contractor as a result of any lack of long term pavement records can be
mitigated through the requirement of the OPRC contract to complete a minimum quantity of
surfacing renewal and pavement rehabilitation within each year of the contract. However our
experience in the New Zealand environment is that these minimum quantities become the
maximum by default as there is little incentive for them to complete any additional quantities,
even when Road User Service and Comfort Performance Measures (RPMs) or Durability
Performance Measures (DPMs) indicate that they should do so.
To better manage this risk and to enable an increased degree of flexibility in ensuring the
quantities to be completed remain well aligned with the needs of the network, we
recommend a review of these quantities is undertaken every 3 years by the Contract
Management Board. These reviews would give careful consideration to the following
aspects:
The outcome of the Contractors Forward Work Programme review in identifying the needs
of the network
RPM and DPM compliance measures
The results of the network deflection testing programme
The results of on-going (and increasingly refined) annual pavement deterioration

modelling by the Clients Consultant
Quality and performance outcomes achieved from previously constructed upgradation,

rehabilitation and surface renewal work.
All available and current pavement deflection information should be provided to the
Contractor to assist him with the identification where weaker pavement sections exist that
may require rehabilitation during the term of the contract.
The maintenance of the sections within the pilot area that have been recently reconstructed
under either the PMGSY or NABARD schemes, and are still under maintenance by the
respective Contractor must be clarified. The lack of routine maintenance within these
sections as a result of insufficient funding or enforcement has the potential to create a
problem of in-consistent Levels of Service within the OPRC network. This outcome then runs
the risk of compromising the pilots objective of improving the condition of the network from
the road users perspective.
Options for mitigating this risk are to:
(i)
Exclude these sections from the OPRC pilot, and then through a series of Separable
Portions add them progressively as their maintenance periods expire. During this
phase it would be necessary to enforce the existing maintenance requirements for
these previously constructed sections through to the expiry of the maintenance period
before formally handing these over to the OPRC Contractor. This option runs the risk
of the respective PMGSY or NAMBARD Contractor still avoiding the required
maintenance inputs; especially where they consider a lack of payment for this is
probable. Where this may occur, the OPRC Contractor will also have to manage the
risk of pricing in the cost of a potential backlog of uncompleted maintenance work,
unless this catch-up maintenance work can be agreed as a variation to the LS. If this
option is pursued then enabling the OPRC Contractor to claim a variation for any
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jointly agreed catch-up maintenance work is recommended. The preliminary
outcomes of the legal review have suggested that the Sample Bidding Documents
already outline under Clause 63 the mechanism for managing changes of this nature.
(ii)
Seek through mutual agreement with the respective PMGSY (if applicable link roads
are included) or NABARD Contractors to an early termination of any outstanding
maintenance periods, thereby enabling the future maintenance of these sections to be
the responsibility of the OPRC Contractor from the start of the pilot. This would enable
the OPRC Contactor to more easily price this work into the Lump Sum and would
avoid the risk of potentially expensive variations having to be negotiated post contract
award. This option is preferred to i) above as it also presents less risk of variable
Levels of Service across the pilot network.
Option (ii) is therefore considered preferable on the basis that any administrational,
contractual and legal issues can be easily resolved.
3.1.2 Signage
The quantity of existing signage within the proposed networks is not extensive, but it is
expected that there will be opportunities under this pilot for the OPRC Contractor to install
additional signage to address identified safety concerns or improve the level of information
provided to road users.
The risk in transferring the maintenance of the signage to the Contractor will be the
uncertainty surrounding level of damage arising from accidents and deliberate vandalism or
theft requiring sign cleaning and replacement. In addition this work is unlikely to have been
undertaken by those Contractors specialising in pavement and surfacing work, and therefore
they are likely to subcontract this out to others who specialise in both sign fabrication and
installation.
However as the existing numbers are relatively low, then the overall extent and cost for this
work is not expected to be large unless there is a significant differential between the existing
and specified standard for signage on the network. To manage this risk it is proposed to
have the Tenderers specify unit rates for the supply and installation of a range of standard
signs in a separate schedule from the OPRC Lump Sum. The OPRC Contractor would then
be required to prepare a schedule of the additional signage required to bring the network up
to the minimum standard and following the Clients approval, he would then undertake this
work and would be paid (at his nominated unit rates) for this work as a variation.
The OPRC Contractor would only be required to include in his price the installation of
replacement or renewed signage and any additional signage specifically identified as being
necessary to achieve the recommended level of Safety Improvements.
The maintenance of all signage within the road Right of Way is therefore recommended.
This component of the contract should also include:
(i)
(ii)
(iii)
(iv)
All regulatory, information and advisory signage, including those relating to

intersection controls on side roads
All warning and hazard signage
All place name and street name signs
All bridge and structure name and location signage
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(v)
(vi)
All related information signage

All kilometre posts, related displacement signage and markers.
As part of maintaining this asset, it is recommended the OPRC Contractor should also
undertake an initial verification of the signage stock records and update the existing signs
inventory within the first 6 months of the OPRC pilot commencing. He should then remain
responsible for regular (monthly) inventory updates where new signs have been installed, or
existing signage has been upgraded or installed.
Maintenance is to include all separate supporting structures such as poles, gantries and
foundation elements.
3.1.3 Delineation and Pavement Marking
The Contractor will need to include in his price only the cost of maintaining the current
quantity of pavement markings to the specified performance standard.
However where there is a significant difference between the existing delineation, and the
standard required by the PWD/PRBDB then again the Contractor would be required to
complete an inspection of the network and provide a schedule of additional pavement
marking and delineation that would be completed as a variation following the Clients
acceptance.
In addition any further delineation recommended as being necessary to meet identified and
specified safety improvements will have to be included under the LS.
Although performance based methods based upon inspection and measured retroreflectively exist, it is recommended that the following input based approach be adopted:
The Contract specifies a minimum number of annual remarks each year to be

undertaken and the Contractor will be required to confirm when each remark had been
completed
The OPRC Contractor be responsible for the inspection and reporting on the condition of
all pavement markings once annually
Any specific areas of high wear or loss identified either from the Contractors audit or that
of the Independent Auditor are remarked within the prescribed response time. An NC
would only be registered where there was failure to achieve either the annual remark
programme or the response time criteria for addressing identified areas of high wear.
Performance criteria would be based simply upon being clearly visible during daylight
hours and for a prescribed minimum distance at night time under full headlights.
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It is therefore recommended that the OPRC Contractor be responsible for the maintenance
of all of the following:
(i)
existing and new pavement markings, including those identifying the location of
underground utility services
(ii)
where installed retro-reflective raised pavement markers (cats eyes)
(iii)
pavement edge markers
(iv)
painted timber rails or similar structures where these are used primarily for delineation
undertake an initial verification of the delineation inventory records and update the existing
inventory within the first 6 months of the OPRC pilot commencing. He should then remain
responsible for regular (monthly) inventory updates where new markings or delineation have
been installed, or existing markings have been upgraded, installed or removed.
3.1.4 Lighting / Traffic Lights
Currently the lighting within the network is administered by the PSEB. The maintenance of
street lights is considered to be a specialist activity and if included it is highly likely the work
will be sub-contracted out as a result.
Although it would be possible to have performance based specifications based on luminosity
prepared, most contracts specifications simply require the Contractor to intervene to replace
bulbs and light support columns when damaged, as it perceived the extra work involved in
further compliance measurement does return sufficient benefits.
As result of the specialist nature of this work, and limited, if any, benefit to the PWD/PRBDB
in transferring the risk of their maintenance to the OPRC Contractor it is recommended that
this asset is not included under this pilot.
However the Contractor should still have role in observing and reporting any lighting
outages, especially where these may present a potential safety hazard to road users. In
addition, where additional lighting needs to be installed for identified safety improvements,
then the OPRC Contractor will need to liaise with the contractors responsible for its
installation to ensure that there is no conflict with the operation of the RoW or other assets
under their control.
3.1.5 Vegetation Control
The maintenance of the vegetation on the verges and intersections is principally required for
safety (maintenance of sight distance) and to ensure there is no obstruction to drainage from
the sealed pavement surface or within other drainage facilities. However there may also be
an additional side benefit of providing improved accessibly to the network shoulders for
pedestrian traffic.
In addition the control of vegetation around drainage facilities is required to ensure the free
and unobstructed flow of water.
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Performance based specifications exist that are based upon the maintenance of the
vegetation within maximum or minimum heights mechanically or effectively vegetation free
conditions with herbicides.
The Sample Bidding Documents require the OPRC Contractor to be required to maintain the
vegetation in the RoW to within the specified height tolerances or standards any side roads,
railway crossings and bridge approaches where this vegetation may restrict sight distance of
drivers approaching the pilot network road. This is to include control of the following items:
(i)
Vegetation on all verges and shoulders including the trimming of any branches
overhanging into the carriageway envelop or obscuring site distance or sign visibility
(ii)
The trimming or removal of all shrubs or saplings from within the envelop
(iii)
The control of vegetation around all signs, guardrails, side delineation posts, culvert
inlets and outlets, the sealed pavement surface, kerb and channel, centre median and
bridge structures
(iv)
The removal of any fallen tree and tree branches from the RoW.
It is also recommended that a very low weighting applied to any observed first time nonconformances to reflect the difficulty often experienced by Contractors in achieving full
compliance across the whole of the network at all times. However any repeat NCs resulting
from the Contractors failure to respond to the initial observation should be weighted much
higher.
It is also likely that the Contractor will be required to maintain a minimum level of vegetation
cover on areas that might otherwise be prone to erosion or scour such as steep drain inverts
or batter slopes. In these situations it would expected that the Contractor may have to carry
out some re-vegetation to replace dead vegetation inadvertently killed off by sprays or new
shoulder construction.
In some situations it may not be practical for the Contractor to use herbicides for control
(e.g. the close proximity of side drains to crops) and therefore the Contractor will be required
to include in his price for a higher level of manual labour for vegetation removal to maintain
the required standards.
Where any trees are required to be removed for planned upgradation works, the OPRC
Contractor should also be responsible for the identification of the trees and seeking approval
from the Forest Department sufficiently in advance of the works to prevent any unnecessary
delay.
3.1.6 Heavy Vehicle Rest Stops
These facilities do not currently exist within the pilot network. Existing roadside dhabas (tea
houses) currently provide an alternative service, but these may currently lack the necessary
parking spaces for heavy vehicles to avoid potential obstruction to other road users.
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Where appropriate upgrades to parking areas adjacent to alternative facilities can be clearly
identified prior to tendering and these are specified within the Contract, then it is
recommended that the Contractor be required to price in the LS for their construction and
maintenance including
(i)
The construction and maintenance of any new access from the roadway, pavements
and surfacing within the parking area
(ii)
Removal of posters and illegal signage from adjacent structures or walls
(iii)
Removal of litter and detritus from within the parking area and its immediate
surrounds
Any additional improvement works subsequently identified would be treated a variation to the
contract.
3.1.7 Slopes and Shoulders
A large percentage of the networks carriageway earth shoulders slope down to side drains
or shallower surface water channels. On bridge approaches these side slopes may be
steeper and extend down into river or irrigation canal channels.
These supporting shoulders and slopes are prone to erosion as a result of vehicle, stock and
pedestrian traffic as well as runoff from adjacent sealed surfaces. Where shoulders remain
well vegetated the risk of scour damage is reduced.
It is recommended that the OPRC Contractor be given the responsibility for the maintenance
and repair to all new and existing carriageway formation slopes and shoulders including:
(i)
The repair and re-vegetation of all scour and erosion channels, with special attention
given to those shoulders and slopes constructed as part of completed upgradation
works.
(ii)
The repair of any subsidence impacting or potentially impacting the sealed

carriageway or associated drainage facilities
(iii)
The repair of any shoulder edge wear or rutting resulting in a drop-off from the sealed
carriageway surface
(iv)
The removal of any build-up in material on the shoulder impeding the free flow of
drainage water away from the sealed carriageway.
Extensive damage to these slopes and shoulders arising from unforeseen events, including
the heavy rainfall events or actions of adjacent landowners, would be excluded and
managed under the Emergency Works provisions once a pre-determined limit of expenditure
within the LS per event had been exceeded by the Contractor.
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3.1.8 Retaining Structures
Where the network road runs adjacent to drainage channels, rivers and canals, or large
drainage and irrigation channels traverse the carriageway, various earth retaining structures
will be used to support the road formation.
The adequate maintenance and repair of these structures is fundamental to the long term
security of the pavement and road formation.
It is therefore recommended that the OPRC Contractor be responsible for the maintenance
and repair to all such structures including all shoulder retaining walls, side drain retaining
walls, culvert and bridge abutment headwalls.
Specifically this work would involve
(i)
Checking and cleaning of all associated drainage structure outlets
(ii)
Repair to earth erosion or scour
(iii)
Minor repairs to cracked and spalled concrete surfaces
(iv)
Repairs to damaged gabion baskets
(v)
Protection of the faces of earth reinforced slopes
(vi)
Removal of slip or flood debris
(vii)
Removal of rubbish, graffiti and illegal posters or signs
Extensive damage to these structures arising from unforeseen events, including the heavy
rainfall events, would be excluded and managed under the Emergency Works provisions
once a pre-determined limit of expenditure within the LS per event had been exceeded by
the Contractor.
undertake an initial verification of all of the existing retaining structures to confirm and
update the existing inventory information database within 6 months of the OPRC Contract
commencing.
3.1.9 Drainage Facilities
The network will contain an extensive quantity of drainage facilities necessary to the long
term stability of the formation and pavement. The adequate maintenance of these facilities is
seen as the key to maximising the lifecycle of both the pavement and surfacing throughout
the network.
The lack of adequate drainage within a number of the urban zones is considered to be the
primary reason for the very poor condition of the adjacent pavement sections. In rural zones,
excessive and prolonged ponding of drainage water either as result of monsoon rains or the
ponding of irrigation water is also expected to contribute to the short pavement lifecycles.
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It is therefore recommended that the OPRC Contractor be responsible for the cleaning and
maintenance of all drainage facilities associated with the road formation including:
(i)
All culvert structures including those under entranceways and side roads
(ii)
All surface water channels and side drains within the RoW
(iii)
The identification and reporting of any drainage impediments beyond the RoW (i.e.
across private property) adversely impacting upon the maintenance of adequate
drainage from the RoW.
(iv)
All kerb and channel
(v)
All drainage ports and associated discharge structures on all bridges, retaining
structures and subsurface drainage pipes.
undertake an initial verification of all of the existing drainage structures to confirm and
update the existing inventory information database within 6 months of the OPRC Contract
commencing. The entire network should also be inspected at least once during the first 12
months during the monsoon season to specifically re-confirm areas of surface flooding
arising from insufficient road culvert and/or side drain capacity.
Where this inspection identifies structural defects necessitating either significant repair or
replacement is going to be necessary during the term of the OPRC then the Contractor will
be required to prepare a justification report, a programme (timing) for this and a price.
Following acceptance of this the Contractor would then undertake this work as a variation to
the contract.
Information from the Phase I feasibility reports and from field observations suggest that
there is likely to be a significant backlog of routine drainage maintenance work the OPRC
will need to price for.
It is therefore recommended that the tender documents stress the importance of a careful
and detailed network inspection that will need to be undertaken by all Tenderers so that they
can appraise and evaluate the extent of this work against the prescribed level of service
requirements. The time to be provided to the Contractor to address this backlog is
anticipated to be quite extensive and this phase will need to be recognised in the time frame
provided before any performance measure based payment reduction mechanism is applied.
While routine maintenance needs (i.e. cleaning, vegetation removal etc) can be reasonably
assessed through visual inspection, significant restrictions in terms of drainage capacity (i.e.
side drain or culvert water way area limitations) can not be readily determined unless
observed during high or extreme rainfall conditions. Where such restrictions are known to
the PRBDB or the PWD as a result of historical flooding events, and it would be reasonable
to have any improvement works included within the OPRC LS, then these sites should be
brought to the attention of the Tenderers during the pre-tender workshops and the tender
documents.
However it is anticipated that there will be a number of instances where the extent of the
drainage limitations is not well understood or the corrective work requires planning (including
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adjacent landowner negotiation) and design that would not be reasonable for Tenderers to
price for during the tendering phase. Under these circumstances further improvement works
identified by the OPRC Contractor should be undertaken, following approval by the Client,
through either Emergency Works provisions or as an agreed variation to the contract LS.
Extensive damage to these facilities arising from unforeseen events such as extensive
flooding would be excluded and managed under the Emergency Works provisions once a
pre-determined limit of expenditure within the LS per event had been exceeded by the
Contractor.
3.1.10 Bridge Structures
The high cost associated with the repair of bridge structural components as well as the
specialist nature of this work would make the pricing of such work within the LS extremely
difficult by the OPRC Contractor.
It is therefore recommended that the OPRC Contractor be responsible for only the routine
maintenance and repair of all bridge structures within the pilot network area. This work would
include:
(i)
The cleaning of all sills and drainage channels
(ii)
The cleaning of all expansion gaps and replacement of worn or deteriorated

expansion gap gussets and fixings
(iii)
The repair or any damaged handrails and bridge guardrails
(iv)
Minor (non-structural) repair of cracked, broken or spalled concrete surfaces
(v)
The repainting of steel handrails and other specified structural steel work
(vi)
The repair of any abutment or pier erosion and scour directly as a result from runoff
from the carriageway or adjacent land
(vii)
The re-levelling of the pavement and abutment interface to maintain a smooth ride on
and off the bridge deck.
(viii)
The removal of flood debris from the bridge piers, abutments or substructure following
a flood event.
(ix)
The observation and reporting to the Client of any significant damage to the bridge
structure as a result of vehicle impact, vehicle overloading or flood damage.
This work would specifically exclude the following:

(i)
Detailed structural inspections
(ii)
The repair of the bridge structural elements such as deck, beams, bearings, piers or
piles.
(iii)
The repair of major scour resulting directly from river or canal flows.
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These activities would be more appropriately managed through separate specialist
professional service or physical works contracts outside the OPRC.
The Opus Technical Submission also recommended that the design and construction of
bridge deck widening as a result of adjacent upgradation work should be undertaken under a
separate TOR and managed externally to the OPRC pilot. However the OPRC Contractor
will still liaise with any other specialist contractors over the timing of this work so that any
potential for programme misalignment is avoided. The work to identify and report upon the
affected structures should commence as soon as the networks to be included in the OPRC
pilot are confirmed along with the sections to be included within the planned upgradation
works.
3.1.11 Guardrails and Pedestrian Barriers
It anticipated that there will be a quantity of existing guardrails and barriers throughout the
network that will need to be repaired and maintained over the duration of the contract. The
construction of new guardrails to protect both pedestrians at vulnerable locations (e.g.
defined road crossing points) and vehicles from adjacent obstacles (e.g. bridge abutments,
concrete monuments, large trees, hazardous drains etc) are expected to feature in
recommended safety improvement initiatives due to them providing a relatively cheap and
effective means of hazard mitigation.
It is therefore recommended that the OPRC Contractor be responsible for the repair or
replacement of all damaged guardrails or similar protection barriers including pedestrian
barriers on medians or walkways.
Where improvement works clearly identify opportunities for the installation of new barriers to
address safety deficiencies at known black spots, then the OPRC Contractor will need to
price into the LS the construction of these new barriers.
undertake an initial inspection and verification of all of the existing guardrails and barriers to
confirm and update the existing inventory information database within 6 months of the
OPRC Contract commencing.
While pricing for the quantity of any existing backlog of repairs will be relatively straight
forward, Tenderers may find it more difficult to determine the extent and cost of future
maintenance repairs over the duration of the contract. It is recommended that the PRBDB
make available any are historical expenditure figures that may exist to assist with this.
An alternative option would be to include this item under the Emergency Works section of
the contract with the Client carrying the risk beyond a pre-defined annual expenditure value.
3.1.12 Protection and Maintenance of Road Right of Way
The comments from the Contracting Industry during the Industry Consultation Workshop # 1
suggested they were uncomfortable with the role of formally policing the RoW protection.
The Draft Preliminary Report on the Legal Review has commented at some length on this
particular aspect. In particular this report highlighted the risk of public disorder arising from
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the Contractor attempting to implement or address law and order issues that were clearly in
the domain of the Police to administer.
It is recommended that the OPRC Contractor assume responsibility for the following
functions and activities:
(i)
Observation and reporting to the Client the development of unapproved access to the
road corridor to or from adjacent private land
(ii)
Observation and regular reporting to the Client and the CMB on any unauthorised
encroachment or occupation of the RoW, who can either individually or jointly raise
this issue with the local Police. Communication via the identified Sapanch (village
head) may further assist in expediting a resolution.
(iii)
License approval by the Client for any commercial activity with the potential to
adversely impact upon the operation or maintenance of the RoW should only be
granted after consultation with the OPRC Contractor.
(iv)
Oversight of the maintenance or relocation of existing utility services and the

installation of new utility services within the RoW. This may extend to assisting with
the actual installation or relocation of underground utilities under a separate and
agreed commercial agreement with the utility service providers, but only where the
utility provider can agree an acceptable price for this work with the OPRC Contractor.
If a price can not be agreed, then the utility service provider will retain the right to use
their own or other resources to undertake this work.
(v)
The reporting of incidents, the physical closure (with barriers) and signing of partial or
total road closures.
3.1.13 Management of Emergency Works

Subject to the recommendations of the final report on Task A8: Allocation and Mitigation of
Risk, the management of the uncertainty surrounding unforeseen events can be undertaken
in several ways. The first issue that needs to be carefully considered is what actually
constitutes Emergency Works? In many situations the nature of any incident or event can be
preceded by a low level phase of activity often well within the capability or the Contractor to
manage within the LS. It is only after the event escalates and the amount of resource input
or damage repair exceeds a reasonable level should the risk transfer back to the Clients
organisation.
Whether or not an Emergency situation is in event can be described either objectively, i.e.
the exceedence of a predefined return interval (usually applicable for natural events such as
earthquakes or rainfall) or subjectively by decree by Government, usually in response to
potential or assessed property damage and/or loss of life.
The World Bank Sample Bidding documents allow for the Contractor to make a request to
the Client based upon the losses or damages occurring as a result of natural phenomena.
The responsibility under these circumstances lies with the Contractor to prepare a Technical
Report justifying the execution of the Emergency Works. The Clients Project Manager then
has the discretion to approve this work.
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The Sample Biding Documents allow for the specification of a Provisional Sum item from
which the Contractor is entitled to be paid following instructions from the Client to proceed.
Where the nature of the corresponds with the specified Emergency Work activities outlined
in the Bill of Quantities, then the Contractor will be paid the appropriate unit rates. Where a
work item is not priced in the Bill of Quantities then the Contractor must use a price
breakdowns included in the Contractors bid to form the unit prices to be included in the
Emergency Works quotation.
While this approach is reasonably transparent for those items clearly priced in the BoQ, in
practice Contractors often argue that the nature of the work varies from that priced, and
therefore the tendered rate can not be applied. This then necessitates further negotiation in
an effort to find an acceptable rate.
For the OPRC pilot it is recommended that the following approach be adopted for the
management of Emergency Works:
(i)
Specify a maximum annual value of Emergency Works that is to be carried by the

Contractor as their risk (i.e. must be included in the Contractors LS price). A detailed
break down of this expenditure would still be submitted to and approved by the
Clients Project Manager where possible in advance of the work proceeding and
cumulative total summarised in the Contractors monthly report. This approach is
expected to limit the incentive for the Contractor to claim the costs associated with low
level events or any consequential damages in terms of routine maintenance activities
arising from low such level events. This is a risk which is considered to be best
managed by the Contractor
(ii)
This approach is expected to favour the Contractor during periods of benign weather
when they would be paid a component for Emergency Works in the LS but will not be
required to carry out any work. This in turn will enable the Contractor to build-up a
contingency fund (if they choose to) over time and will enable him to better manage
his cash-flow in completing low level Emergency Works activities.
(iii)
Only once the annual value of Emergency Works has been exceeded, would the
Contractor then be paid from the Provisional Sum item using the unit rates for
applicable work included in the Contractors BoQ, and as set out in the Sample
Bidding documents.
(iv)
The impact of escalation on the value of the Emergency Works completed by the
Contractor needs to be recognised. Over time the actual quantity of work to be carried
by the Contractor before becoming the Clients risk will diminish as a result of price
escalation, and this aspect needs to be addressed in the Contract to avoid the
proportion of risk carried by the Client increasing over its duration.
3.1.14 General Issues
To facilitate involvement of the local village and township communities in the

management of the road networks it is recommended that the CMB be required to
develop a consultation plan that would identify the heads of the village or townships
(Sapanch) within the OPRC network and a programme of regular meetings with this
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group. The objectives of these meetings would be to provide a forum for discussion
over specific issues relating the operation and maintenance of the road network and
how these may be impacting upon the local communities.
The contract documents will make it mandatory that the verification of existing
inventory data and the collection of new inventory data in the field by the Contractor
include the geo-referencing of the assets by GPS at the same time.
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End of Contract Residual Road Condition
4.1
Introduction
The requirements for this section of the Contract Format report are outlined within the following
paragraph:
Task A6: Development of contract format.

25.
End of contract residual road condition. To ensure that the road is returned in a fit
condition for service that will not require major capital maintenance immediately following the
end of the contract, the Consultant shall specify separate residual life for each element of the
project road. The Consultant shall review, as part of this assignment, the impact of the
contract on asset value up to the end of the contract and should advise the Client on the
inclusion of additional measures during the contract period to achieve the minimum required
asset value at the end of the contract.
The Opus Technical submission methodology is outlined below:

End of Contract Residual Road Condition: We recognise the importance of ensuring that
there is no asset consumption over the duration of the maintenance contract and that the
network is returned without the need for any major periodic maintenance immediately
following the end of the contract. Our approach to achieving this will involve both modelling
the impacts of the proposed long term Forward Works Programme and Financial Models
combined with the practical understanding of the networks needs over the next 10 years within
the context of planned improvement and maintenance works to be completed. Our experience
with these contracts has indicated that relying on condition indicators alone to encourage
contractors to carry out sufficient structural (pavement) investment is unlikely to be successful,
and we would seek to identify minimum underpinned quantities of both pavement
rehabilitation and surfacing renewal to be completed each year to ensure any risk of asset
consumption is eliminated.
During the negotiations phase the following additional steps where proposed and accepted:
In accordance with the requirements of Task A2, Opus will pursue an approach that will
allow the contracting industry the freedom to embrace the concept of Performance Based
Road Contracts. We will appropriately reconcile with the Client on the manner the
incorporation of the optimised and agreed single payment method from the financial model
output into the contract documents for the tenderers reference.
As this approach will still require discussion over the most appropriate level of risk transfer to
the contractor as well as managing the end of contract pavement condition we recommend
the following staged approach to jointly manage these issues.
Step 1. Prepare a preliminary report as soon as possible after contract award outlining the
format of the various performance based models in operation in both New Zealand and
Australia
Step 2. Seek feedback from the contracting industry,
Step 3. Review the outcome of Task B2,
Step 4. Seek the views of the PRBDB following the overseas tour.
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Step 5. Opus would then prepare an additional section to Interim Report No. 1 clearly
outlining the most appropriate method of achieving the expectations of the PRBDB.
The objectives of the preliminary report were therefore three fold:
To provide the members of the Government of Punjab (GoP), Public Works Department
(PWD), and the PRBDB a level of background information on the performance based
contracts, included some of those in the overseas study tour, thereby enabling them to ask
more focussed questions relating to this particular component during the tour.
Briefly outline the other currently available means of determining residual pavement
condition (life).
To enable a better understanding of the practical application of the concept of underpinned

quantities as one option for the management of the residual road condition.
3
This report was prepared and submitted to the PRBDB in August 2008 and included the following
summarises and recommendations:
All of the OPRCs currently in operation and known to Opus utilise the requirement for the
Contractor to complete specified annual quantities (defined as m2 of either surfacing renewal
or pavement rehabilitation) as the basis for managing the risk of pavement asset
consumption. These annual quantities will only be broadly specified (i.e. pavement
rehabilitation or surfacing renewal) and will not stipulate the nature of the design other than
the rehabilitation must achieve a minimum acceptable lifecycle.
While further research into alternative ways of measuring and managing this risk will be ongoing, there is presently still insufficient confidence over the use of condition measures or
pavement strength assessment tools as the only mechanism for ensuring unintended
consumption has not occurred.
It is recommended that the Client undertakes an annual network wide deflection survey. This
information can then be analysed and over time should permit an average target value to be
calculated that would then assist both the PRBDB and the OPRC Contractor in determining the
impact that routine maintenance work and completed pavement improvement work (upgradation
and rehabilitation) is likely to have on the network end of contract road condition. In future contracts
this information could then be relied upon to a greater extent in measuring network residual
condition.
In addition other performance based road maintenance contracts have
importance of condition measures such as roughness, rutting and
maintaining adequate pavement repair and construction workmanship.
attention being applied to the way repairs and construction joints are
significant increase in the level of peak roughness being recorded.
Refer to the Preliminary Report on the Punjab OPRC Contract Format.
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26
however highlighted the

pavement deflection in
For example insufficient
finished can result in a

The following approach is therefore recommended for inclusion within the OPRC pilot contract
documents to mitigate the risk of unintended pavement consumption over the term of the contract.
From both field observations and HDM modelling outputs that the contract documents
specify a minimum annual quantity (m2) of surfacing renewal and pavement rehabilitation
that must be undertaken by the Contractor. It will remain the responsibility of the Contractor
to identify the location of this work along with the detail of the proposed design.
As the level and detail of the background information and pavement performance history will
still be limited at the commencement of the OPRC pilot, it is recommended that the contract
permit regular reviews of the annual quantities combined with remodelling of the network as
the data sets become more robust and complete. These reviews should be undertaken
initially at a 3 yearly interval until it is agreed by the CMB that there is an acceptable degree
of stability in the Forward Work Programme.
The Contractor will be required to provide verification that his proposed pavement design is
in line with the IRC design methods, has allowed for defined overload conditions and that
through a rational design process will achieve a minimum defined design life of at least 15
years before the next rehabilitation will be required. This verification would have to be signed
off by the Contractors nominated pavement design Engineer before this would be accepted
by the Client.
Define the mechanism permitting substitution between surfacing renewal and rehabilitation
quantities to occur to account for the level of variability that is likely to occur between years.
The extent of any substitution within any one year should be limited to 20% of the specified
annual quantities. The Contractor will be required to submit and if necessary negotiate with
2
the Client on a schedule of unit rates (cost per m ) for routine surfacing renewal and
pavement rehabilitation options. For example where the Contractor verifies the need to do
less pavement rehabilitation in a particular year than that specified, then the reduced area of
this would be valued at the agreed rate for the work and an equivalent value (based again on
the agreed rate) of surfacing renewal approved by the CMB to keep the LS intact. It would
necessary for the negotiation of these rates to be initially based upon known current market
rates for this work. It would be Contractors responsibility to demonstrate why these rates
can not be applied to the OPRC works.
This approach is set out in the following example:

Specified annual quantity of pavement rehabilitation:
Agreed rate for moderate rehabilitation
Specified annual quantity of surfacing renewal
Agreed rate for 40mm AC overlay
125,000m
2
870Rs/m
2
300,000m
2
350Rs/m
2
Contractor verifies that only 115,500m of rehabilitation is required for the year.
2
2
Therefore 8,265,000Rs ((9,500m x 870Rs/m ) are available for additional surfacing renewal.
2
2
This would equate to an additional 23,614m (8,265,000/350Rs/m ) of 40mm AC overlay that
would have to be undertaken by the Contractor in place of the substituted rehabilitation.
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Determine an acceptable distribution of pavement deflection values that must be achieved

through post construction testing on all rehabilitation and upgradation works. This will assist
in encouraging the Contractor to apply adequate Quality Control in all pavement construction
works which will give greater confidence that the expected design life of the rehabilitated
pavements has actually been achieved.
The achievement or bettering of any defection measure applied to new pavement

construction by the Contractor will potentially provide benefits to the Client beyond the term
of the OPRC pilot through better performing pavements and reduced future routine
maintenance costs. To further encourage the Contractor to apply best practice construction
techniques and maximise this long term benefit, it is proposed that a further positive financial
incentive be provided where it is clear that pavement strength being provided exceeds the
defined target value. This mechanism would be based upon for example a PS item being
paid to the Contractor at the end of each year where the average deflection values on the
newly constructed pavements exceeded the target value by say at least 5%.
Set appropriate Levels of Service for other Durability Performance Measures to ensure both
the integrity of the pavement is maintained and repair or construction workmanship is given
sufficient emphasis.
4.2
Residual Life for Non Pavement Assets
The ToR required consideration be given to the residual life for each element of the project road
and not just the pavement.
To develop an increased level of understanding over the base condition and expected lifecycle of
other road assets such as drainage facilities, bridges or signage, the following approach is
recommended:
Ensure the inventory of the other assets is complete
Prioritise those assets that have the greatest potential for high future renewal costs, e.g.
Large culvert structures rather than all culverts
Survey all the high risk assets and rate their current condition on a scale ranging from very
good to unacceptable
Where sufficient information exists over the age of the assets to calculate the rate of
deterioration, then use this to develop a Forward Work Programme for asset replacement.
Where this information does not exists then a risk based approach can be applied estimate
what future replacement needs and costs may be.
As the pavement and surfacing comprise the largest proportion of the networks asset value it is
appropriate that this is given the highest level of priority. However as the accuracy and
completeness of inventory data improves over time it is recommended that the steps outlined above
are undertaken and form a requirement of the Part E ToR when this is prepared.
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Recommended Procedure for Joint Inspections Prior to Network

Hand Back.
The development of this procedure is outlined under the following Terms of Reference Section:
26.
The Consultant shall also specify a procedure for arrangements in the contract for detailed
joint inspections about 1 year prior to hand back of the roads to be carried out by the Agency
and the Contractor. In these inspections likely works needed are noted and remedial action
is expected to be taken in accordance with an agreed program. For compliance of the
agreed program, another inspection shall be carried out no later than six months prior to the
end of the contract. A similar procedure covering all elements of the project road may be
specified prior to the end of the contract to ensure work has been carried out in accordance
with the agreed program and to assess any other works needed to achieve the required
standard at contract termination.
The Opus Technical submission methodology for this is outlined below:

End of Contract Inspections: To complement the management of the asset condition and
in recognition of the drivers for the contractor to also reduce inputs near the end of the
contractual cycle, we will prepare a comprehensive inspection programme that will identify
any defects and ensure their correction by the contractor before the end of the maintenance
defects period. In preference to relying solely on inspections near to the end of the contract,
we would also include in this programme a series of internal reviews of the contractors own
quality assurance systems throughout the duration of the contract to ensure they have set up
and are effectively operating a defects management system.
5.1
Proposed Procedure
Part of the requirement of the Contractors own quality assurance system will be the development
and operation of a maintenance defects list that must record all known defects identified by the
Contractor from his routine network inspections. This list must be complete and comprehensive at
the end of each inspection cycle.
It recommended that it be a requirement in the Contract that the Clients representative will join the
Contractor for these inspections at least initially once every 3 months. This inspection will focus
specifically on the identification and recording of maintenance defects. This will permit on-going
verification by the client that this procedure is both in place, and is rigorous in ensuring that all
observable defects are being picked up and recorded. If a high degree of compliance is confirmed
on two 6 monthly inspections then it may be appropriate to relax these joint inspections to once
every 12 months.
This list will then form the basis of identifying any outstanding defects during both interim joint
inspections as well as the detailed joint inspections to be programmed at 1 year prior to hand back,
at 6 months prior to hand back and within 2 months of the expiry of any defined maintenance
defects liability period.
At each of these inspections the list of defects, and any others identified during the joint inspections,
will include the nature of the remedial work and the time frame for their correction jointly agreed and
recorded. Any outstanding defects will need to be corrected to the satisfaction of the Client and the
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subsequent incoming Contractor (in the event of a change in Contractor) before the final release of
the Contractors pre-transfer bond or retention monies following the completion of the contract
works.
A failure to record observable defects and any defects left beyond the defined timeframe for
correction will attract non-conformance points and will add to the quantity of points that could trigger
a payment deduction. The proposed compliance framework weightings are high for repeat nonconformances and therefore an incentive for the Contractor to address defects following their initial
observation rather than leave them all until the end of the contract duration and then attempt to
address them all at once. An increase in the weightings applied in the last year of the Contract is
another mechanism that will further encourage the Contractor to address any defects backlog.
An example of a defects list is illustrated in the following figure:
Figure 1: Example of a Failed Repairs List
In subsequent contract documents it will be desirable to also require the (incoming) Contractor to
undertake a joint inspection with the Client and outgoing Contractor within two weeks of taking
possession of the network. This requirement will then avoid the potential for a dispute between the
new Contractor and Client over the quality of repairs and/or condition of the network which, if this
was to occur, may result in the incoming Contractor seeking a variation to correct claiming that the
out-going Contractor should have rectified prior to the network being handed back. The release of
the Pre-Transfer Guarantee will be made conditional on the out-going Contractor (if there is a
change) to undertake this joint inspection within the required time frame.
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Financial Arrangements for Performance Guarantees
The development of the contract Clauses providing for a performance guarantee is outlined in the
following Terms of Reference section:
27.
In addition to the standard performance guarantee, the Consultant shall also suggest a
financial arrangement such as retention money or depositing a suitable percentage of the
amount of agreed remedial works in escrow account which the department may utilise if the
Contractor fails to complete the work.

Contract Financial Management and Compliance Framework ....The option of applying
of a variable level of payment retention will need to be carefully examined given the long
duration of the contract and the risk that this may unfairly penalise the contractor. An
alternative that may avoid this difficulty is to require the contractor to have a performance
bond in place throughout the duration of the contract. .
6.1
Background and Options
The following two options will be provided to the Contractors in the conditions of contract:
A stepped scale of specified retentions based upon a percentage of the physical works cost, for
example:
5% for the first 10 crore (100mRs)
2.5% for the next 30 crore (300mRs)
1.0% for any amount in excess of 40 crore (400mRs), with a maximum retention value of 5 crore
(50m Rs).
The final value will need to be sufficient to cover the risk of both defective work that remains
outstanding as well as any backlog of uncompleted routine maintenance work that would need
to be completed before any replacement Contractor could continue to maintain the network to
an adequate standard.
A Performance Security or Bond

6.1.1 Retentions Option:
While it is common for shorter term construction contracts to utilise retentions as a means of
ensuring the Contractor completes all of the contract works and maintenance defects
liabilities this is less common in with the longer OPRC contracts as a result of:
Over 10 years at the rates suggested above, the value of the retentions held
(including the lost opportunity cost to the Contractor from the monies retained) would
be significant and has the potential for creating financial hardship for the Contractor.
The level administration required by the Client to manage the retentions and their
subsequent release would be more complex than with bonds
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4
The financial model for the selected networks under a combined contract with a uniform
payment of 75cr per year would result in suggests that the maximum retention value of Rs
50m (5 crore) could be achieved after 3 years. This would equate to approximately 2% of the
average annual contract value.
Provided this value of retentions is adequate to cover the value of any substandard
construction or inadequate performance by the Contractor, then it is proposed that this sum
would be retained by the Client, along with any compound interest, until the end of the
contract duration. Upon the issue of the Taking Over certificate by the Engineer, 50% of
these retentions and interest would be released, and the balance paid upon the expiry of the
Defects Notification period.
6.1.2 Autonomous Un-conditional Performance Bank Guarantee (Bond)
The preferred alternative would be for the Contractor to obtain an un-conditional
Performance Guarantee (Performance Bond) to a value that would provide the same level of
security to the Client but with a reduced potential for financial hardship and administrational
complexity than that associated with retentions. This bond would need to be in place within a
specified period following after notification of contract award.
It is recommended that the following unconditional performance guarantees are provided by
the OPRC Contractor to cover the three distinct phases of the OPRC pilot contracts:
Construction Guarantee:
This bond needs to cover the estimated value of all of the planned upgradation works during
the term of the OPRC pilot. It is recommended that 50% of the bond is released following
completion of all of the planned upgradation works and the balance upon acceptance of all
post construction inspection and subsequent pavement deflection testing.
Operation and Maintenance Guarantee:
This bond needs to cover the risk of inadequate maintenance or re-work arising from poor
pavement rehabilitation construction or maintenance activities. The value of this guarantee
would be expected to be to the same value as the aggregated sum of the retentions (e.g. 5
crore) plus another 10% to allow for any risk associated with the bond being based upon
fixed value rather than on a percentage of actual physical works claims, which would include
any variations including emergency works. However it is recommended that this value be
reviewed on a 2 yearly basis and if necessary the value amended in line with the actual
contract value. This bond would be released at the end of the contract term.
Pre-transfer Guarantee:
This bond would need to be provided by the OPRC Contractor at 3 years from the end of the
contract duration and must remain valid for 2 years after the end of the contract. This bond is
to ensure that the Contractor complies with his obligation to carry out the required level of
maintenance right through to the end of the full contract term. It should be for an amount
4
Task B1 Draft Report on Review Suitability and Selection of the OPRC Pilot Areas
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equivalent to the average annual cost of the maintenance activities (including pavement
rehabilitation) completed over the previous years. This bond would be called in at the
discretion of the Client in the event that the average number of Durability and Road User
Service and Comfort Performance Measure Non-conformances over the last 3 years of the
contract exceeded the average annual number of non-conformances for the previous years
by more than 5%.
6.2
Other Performance Guarantees

6.2.1 Pre-construction Guarantees
Tender Bond:
It is recommended that a small Tender Bond be required from all Tenderers to
encourage their compliance with the tendering process. This bond would be released
at the time of financial closure of the bid.
Financial Closure Bond:

It is recommended that a small Financial Closure Bond be required from the
preferred Tenderer upon notification of their preferred Tenderer status, and should
be only large enough to encourage a rapid resolution of any negotiation process and
achieving financial closure. This bond would also be released at the time that
financial closure of the contract is achieved. It should be of sufficient value to cover
the costs to the Client in the event that financial closure is not achieved and the
tender has to be re-advertised. Some further discussion over the usual tendering
practices by the PRBDB is warranted before a final decision is made on applying this
bond.
6.3
General
Interviews held with Contractors during the preparation of the report on Contractor
5
Capacity under Task A4 indicated that the Contracting Industry was familiar with the
use of Performance Bonds and they did not foresee any problems with the
application of this to the OPRC pilot format.
Task A4 Report on Confirmation of Contractor Capacity October 2008.
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Compliance Framework
The requirement for developing a compliance framework is outlined in the following Terms of
Reference Clause:
28
The Consultant shall prepare a compliance framework for ensuring compliance of the
works, including the penalty regime that will prevail in the event of any non-compliance by
the Contractor. This will also include methods and systems involving public/road user
interactions related to road situation/condition.

Contract Financial Management and Compliance Framework There are a number of
contractual mechanisms available to manage the risk to the PRBDB of either noncompletion of the work or non-compliance with the required Road User Service and Comfort
and Key Performance Measures (KPMs) (measurable asset condition parameters that will
be used to define the required service level targets the contractor must achieve) that will be
explored as the contract format is established. Minor breaches in KPM or RPM targets will
usually attract an agreed level of payment reduction that is aligned with the reduction in road
user comfort and/or safety that has resulted. As an example, major non-conformance with
any of the performance targets could place an increasing onus on the contractor to
demonstrate how his systems will be modified to prevent any re-occurrence, along with the
risk that the contract may be terminated if the number of major non-compliances exceeds a
stipulated threshold within a pre-determined time frame.
Should two contract areas be agreed upon, we would also explore the option of having a
mechanism to transfer some work from one contract to the other in the event of inadequate
performance by one of the suppliers. From our experience this would not only reduce the
risk to the PRDBD of poor or non performance but would also further encourage the
contractors to strive for a good level of achievement and quality.
We would also use the teams Legal Adviser to undertake a legal review of the contract
format during this phase to ensure that there were no significant problems likely to be
encountered further on.
There are four potentially inter-related mechanisms available for encouraging compliance with the
intent of the OPRC pilot:
Contract Management Board (CMB)
Payment Penalties for Durability Performance Measure, Road User Service and Comfort
Performance Measure and Management Performance Measure Non-Compliance
Liquidated Damages for Late Completion of any Defined Separable Portions (e.g. Upgradation
Works or annual quantities of pavement rehabilitation and surfacing renewal)
Performance Assessment through regular evaluation
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7.1
Contract Management Board
It is recommended that a Contract Management Board (CMB) of senior management personnel

from both the Contractors and Client organisation is established. This Board would meet at regular
(at least 6 monthly) intervals to review performance, and who would have the authority to agree
necessary actions to address any issues threatening the successful outcome of the OPRC pilot.
7.1.1 Objective
The members of the board are to responsible for fully representing their relevant
organisations in terms of delivering the required project outcomes, nurturing project culture
and addressing the financial interests of their organisations.
7.1.2 Key Roles
The Key Roles of the Board would be:
Progress Monitoring: Review project progress in terms of physical achievement and
project performance measurers.
Resolving Conflict: provide a mechanism for resolving issues and disputes before they
escalate into the formal procedures of mediation or arbitration. The Board would provide a
higher level perspective to dispute resolutions that are not always appreciated at a project
level. Contractual issues that can not be resolved would still be referred to the Engineer to
Contract for a final decision.
Reallocation of the Lump Sum: The Board would provide comments and
recommendations on significant changes to the project, such as significant reprioritisation of
deliverables, significant re-allocation of funds, annual trade-offs between treatment types.
Resources: Because the Board would comprise senior management of the contracted
organisations, resource matters can be discussed and agreed. Members of the Board are
expected to have the appropriate authority to make and implement the necessary resource
decisions. These resource issues would include:
Staff Resources and Changes

Plant and Material Resources
Contract Conditions: The Board would be able to make recommendations to modify the
existing conditions of contract. The Engineer to Contract would then make the final decision
and formalise the variation in writing.
Validating Major Non-conformance: The Board would confirm the validity of any major
non-conformances.
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7.2
Payment Penalties for Durability, Road User Service and Comfort and Management
Performance Measure Non-Conformance
The contract performance system will be divided into two key groups being office based
management criteria (Management Performance Measures) and field condition criteria (Road User
Service and Comfort Performance Measurer s and Durability Performance Measures). Further
detail of these service levels is outlined in the Task A1 report on Definition of Service Level
Classification.
7.2.1
Durability Performance Measures (DPMs)

DPMs are contractual requirements, which must be delivered annually. Failure to deliver
the specified DPM criteria will result in a Non-Conformance for that measure.
An example DPM for this network would be meeting the required standard of Drainage
Maintenance work within the sections audited.
7.2.2
Management Performance Measures (MPMs)

MPMs are a set of performance criteria that reflect the Contractors ability to successfully
manage the OPRC contract.
MPMs will be measured monthly, in terms of a compliance system, by the Contractor with
inputs from the Client (or Consultant).
The Contractors response time to addressing notified complaints concerning incidents or
network condition issues is one example of an MPM.
7.2.3
Road User Service and Comfort Performance Measures (RPMs)

RPMs are a set of performance criteria that reflect the Contractors ability to successfully
maintain the pavement and corridor to the required service levels and safety standards.
RPMs will be measured by the Contractors auditor.
Results would be forwarded to the Independent Auditor and Client (Consultant) for
assessing the monthly Contractor Performance Appraisal and including into the monthly
Project Performance Report.
Maintenance of the vegetation standard level of service would be an example of an RPM.
7.2.4
Proposed Method for Non-conformance payment deductions

MPMs and RPMs will be measured monthly presented in a Project Performance Report.
DPMs would be typically measured and reported annually.
Minor Non-Conformances (NCs) will be issued against each individual MPM, RPM or
DPM, where the Contractor fails to achieve the required criteria.
However in recognition that no road network is ever perfect and to provide an appropriate
level of tolerance to the Contractor failing to achieve full compliance at all times the
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following bucket system of allowing a prescribed maximum number of NCs to be
accumulated at any time before payment penalties are applied.
This proposal is outlined in the following diagram:
Audit NC Management System

Road User Service and
Comfort
Performance Measurers
Scheduled
Independent and
Internal Audits
Management
Performance Measurers
Customer Relations
Quality Systems
Programme Delivery
Durability Performance
Measurers
Scheduled Annual
Surveys
From other sources
Observation
Specified
Item
Monthly Reports
NC
NC
Corrected NCs Removed

from the bucket after
Client Acceptance
Limit of 30
Observation
NC
Specified
Item
$$$ Major
Penalty
Figure 2: Proposed Contract Performance System
A Contract Performance Appraisal will be undertaken monthly in respect to the number of

Non -conformance points that have been accrued.
The Monthly Network Conformance Score would be calculated using the following equation:
(non-conformance x weighting x sub-weighting)

The following Table outlines how the proposed payment adjustment regime will accumulate
points based upon the NCs recorded and how these will then result in the applied payment
reductions.
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Item
Repeat NonConformance
Report
Failure to
identify and
record defects
Road User
Service and
Comfort
Performance
Measures
breached
Durability
Performance
Measures
breached
Management
Performance
Measures
breached
Standard
Weighting
Sub-weighting
Consecutive
nonConformance Reports relating
to the same occurrence in a
rolling 3 month period
Inspection and recording
regimes as set out in the
by the CMB
Any one of the RPMs set out
in the maintenance
CMB
measures set out in the
by the CMB
measures (including safety)
set out in the maintenance
CMB
1,2
1,2,3
No. of Months
No. Days
All other verified

NonConformances
Any other breach of the

specifications or any other
failure to meet contractual
obligations not specifically
covered in the above sections
Aggregate NonConformance
Report Score for
the Month
30 Full Performance Payment is made
Notes
Sub -weighting
increased in the
last year of the
Contract
Sub-weighting
increased
progressively
during the last
year of the
Contract
Sub-weighting
relates to the
number of full
calendar months
DPM is breached.
Sub-weighting
relates to the
number of days
the MPM is
breached. Part
days would be
countered as a
full day.
31 or more No performance payment is made.
Table 4 Proposed Table of Contract Non-Conformance Scores and Payment Reductions
It is recommended that the monthly LS maintenance fee payment to the Contractor comprise
a performance component set at a percentage of the overall maintenance fee sufficient to
encourage compliance but without being punitive. This performance fee would be paid until
there were more than 30 non-conformance points accumulated after which there would be
no payment made.
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Repeat Conformance Report scores in excess of 31 for consecutive months would give the
Client the discretion to terminate the contract. It will be necessary for the trigger score to be
rigorously validated in the field to ensure that it achieves a fair balance between ensuring
there is an acceptable level of performance being achieved by the Contractor while not being
seen as being unduly harsh or impossible to achieve.
Corrected NCs would be removed from the bucket once verified.
7.2.5
Phase in Period
To assist the Contractor in adjusting his performance to match with the conformance
requirements, it is recommended that variable phase in period be applied for the three
forms of performance measures, during which there will be no performance payment
made to the Contractor, but the performance assessment undertaken as normal and the
score provided to the Contractor. This would allow time for the Contractor to adjust to the
conformance regime without threatening the continuance of the contract. For some of the
easier MPMs such as reporting etc, this phase in period may be as short as 3 months.
However for some of the more difficult DPMs, potentially requiring much more work to
undertaken to bring the network up to an acceptable standard, this period could be as long
as 2 years.
7.2.6
Appointment of an Independent Auditor

It is recommended that the PRBDB appoints an independent auditor who would undertake
the following:
(i)
(ii)
(iii)
(iv)
(v)
Review the Contractors Quality Plans and Quality Systems

Audit the Contractors systems, procedures and records to ensure sufficient
inspections, maintenance works etc are being undertaken
Nominate the random sections of the various road categories that would be
independently audited up to the define percentage of total length at the specified
frequency.
Upon request of the PRBDB, accompany the Contractor during their self audit
inspections
Conduct independent random audits of sections of the road network to assess the
validity of road user and Client feedback.
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Independent Auditor
defines monthly random
audit sections and
undertakes independent
audits
Annual Survey of
Durabilty
Measurements
and Conformance
with Targets
Contractor's Auditor
carries out monthly audit
on MPM and RPM
conformances and
reports to the Client
Client Assesses the

number of new NC's
added and resolved
NC's removed from the
Score "Bucket". Monthly
performance payment
made if score remains
below the threshold
value.
Other observed NC's

from joint inspections by
the project team and
verified reports from the
public and road users
Figure 3: Diagram of the Audit Cycle
7.2.7
Contractor Self Audit Process

The Contractor will be required to establish and operate a monthly operational compliance
system.
Example details of a compliance audit follow:
a) The Contractors auditor would be a nominated person who is external to the project
team.
b) Audit sections will typically be of five (5) road kilometres in length.
c) A minimum of 15% of the network State Highways and 10% of the Major District Roads
and 10% of Other District Roads would be audited monthly by the Contractors Auditor.
Subject to acceptable levels of compliance and agreement by the CMB, the audit
frequency on Other Districts Roads could be relaxed to 2 monthly intervals. The audit
sections would be randomly nominated by the Independent Auditor at a time agreed by
both parties. With agreement of the CMB, the sample percentages may be varied in
response to the findings of the Independent Auditor and the level of non-conformances
being recorded.
d) The auditing process, including the measuring and assessment system would be
accepted by the Independent Auditor prior to implementation. Results would be
expressed as either Conformance or Non-Conformance.
e) The auditing system would be fully implemented within two months of contract
commencement.
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f)
All non-conforming items must be clearly identified in the monthly Project Performance
Report.
g) Results from independent audits carried out by an Independent Auditor will be used to
validate the Contractors compliance results on a monthly basis.
Where possible, it is recommended that photographic examples of conforming or nonconforming work should be included in the contract specifications to assist the Contractor
and his Auditor in assessing compliance. This approach is likely to particularly useful in
defining what are conforming or non-conforming RPMs but where definitions can be
difficult or lengthy to specify in words.
7.2.8
Project Audit Team

The Client will be given the ability through the contract to also instigate a Project Audit
Team. The Project Audit Team would typically consist of representatives of the Client (and
Consultant if appointed), the Contractor and where appropriate representatives of the
Local Community. The Project Audit Team would undertake a joint audit of the network
from time to time. Results from this exercise would then be reported back to the Project
Management Board through an agreed mechanism that fairly represents the overall
condition of the network.
7.3
Liquidated Damages for Late Completion of Defined Separable Portions
As it will be the responsibility to OPRC Contractor to achieve the contracted outputs and to ensure
construction quality, it would not appear necessary to define separable portions for planned
upgradation, rehabilitation or surfacing renewal work. However it is recommended that consideration
is given to the following aspects during contract document preparation:
Identify (from Task A8) periods of the year when the risk of construction failures resulting
from adverse climatic conditions (e.g. Monsoon rains, low daytime temperatures etc) is
expected to be too high.
Specify the requirements for increased construction quality control verification for all
pavement improvement and surfacing renewal works completed in the last two years of the
contract. This is considered necessary to manage the risk of premature failures soon after
the end of the contract maintenance defects period.
7.4
Transfer of Work between Adjacent Contracts
Consideration has been given to the option of transferring some components of the work between
adjacent contracts as a result of persistent non-conformance of one Contractor, as an alternative to
completely terminating the contract. However this compliance mechanism has not been considered
further at this time due to the following potential practical and contractual difficulties:
Changing resource demands as a result of increased or decreased work loads may present
significant difficulties to both Contractors
The scope and location of the changing work loads are unlikely to be fairly compensated
through any simple adjustment to the respective LS monthly payments
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41
Issues relating to Performance Bonds, Insurances and the management of related

Contractor overheads as a result of changes to the scope or location of the works are likely
to become more complicated and difficult to administer.
The other mechanisms for encouraging Contractor compliance are expected to be simpler to
administer and effective in achieving the desired outcomes.
None the less it is recommended that some readily assessed measures of Contractor performance
(MPMs) be developed to enable a fair basis of comparison between respective contracts to be
derived and regularly reported. One of these should include the outcome of the Contractors
performance evaluation outlined in Section 7.5 below.
7.5
Regular Contractor Performance Evaluation
It is recommended that regular (monthly) assessment of the Contractors performance be

undertaken and scored against predefined and agreed criteria by the Client. The criteria would be
jointly developed between the Contractor and the Client as soon as possible after the award of the
Contract, along with an agreed weighted scoring system. The achievement of a minimum monthly
performance score would then form one of the MPMs in the Conformance Schedule.
The success of this evaluation process is very much dependent upon the following factors:
Establishing clear and objective assessment criteria
Ensuring as much consistency as possible of how the scores are derived and applied
Adherence to a regular assessment programme and ensuring feedback of issues occurs to

those individuals who in the best position to effect the necessary changes.
The following figure illustrates an example Evaluation Score Sheet:
8-00719.0A / A61NC
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PERFORMANCE EVALUATION OF MAINTENANCE CONTRACTOR
Contract Title:
Output and Performance Based Road Contract #1
Contract Number:
OPRC 1
Appraisal Date:
Contract Value:
Region Office:
Contractor:
Appraisal By:
Contractors Manager:
Evaluation Status:
Evaluation status either: interim, final or contract extension
Criteria
Grade
Weakness
Strength
Management (20%)
Skill level and competency
N/A
Risk management
Responsiveness
Quality Assurance
N/A
N/A
N/A
N/A
N/A
N/A
10
N/A
10
N/A
10
N/A
N/A
10
N/A
10
N/A
N/A
N/A
20
40
60
80
100
Production (45%)
Contractors Programmes
Ability to meet programme
Achieves the specified standard
Defect management system
Achievement
Network Condition
Health and Safety (20%)

Safe work practices
Traffic management control
Administration (15%)
Financial
Handling of variations
Reporting
Overall % Ratings
Brief Comment:
Overall Rating
%
(please tick one)
Unacceptable Performance
<36%
Below Average
36-47%
Average
48-57%
Above Average
58-72%
Good
73-87%
Excellent
88-100%
Signatures:
(Client Representative)
Figure 4: Example Evaluation Score Sheet
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(Contractor's Representative)
The Tender Evaluation Procedures
The development of tender evaluation procedures is outlined in Clause in the Terms of Reference:
29.
The tender evaluation procedures: The Consultant shall work with the GoP to develop an
evaluation procedure that meets the objectives of obtaining the best value for money over
the term of the contract, whilst at the same time provides flexibility to allow the bidders to
propose the services and risk allocation they consider to be best asset management
practices and also conforming to any legislative requirements that govern the letting of
contracts by the GoP.

Tender Evaluation Procedures: The success of any contract is ultimately reliant upon the
selection of the best contractor that will provide the greatest value for money outcome. We
are well aware of the importance of achieving this outcome and will utilise our experience in
evaluation systems and procedures to provide the GoP and PRBDB with options to enable
the value of the contractors non price (quality attributes) to be determined in a transparent
way. This approach will enable the GoP and the PRBDB to establish, in a quantifiable way,
how much they are prepared to pay to secure the highest quality contractor over above the
supplier with the next highest attributes.
There were no negotiated amendments to this section.
8.1
Contractor Prequalification
8.1.1 Prequalification Needs Assessment
Prior to the development of any prequalification criteria, and subsequent to the outcomes of
the Industry Consultation Workshop #1, it is necessary to firstly consider whether the
development and implementation of a prequalification phase for these pilot contracts is
worthwhile.
The following are considered to be the risks and potential outcomes of not proceeding with a
Pre-qualification stage:
Too few tenders received to ensure truly competitive pricing for the work, and
exposing the Client and the World Bank to having to accept higher than necessary
prices for the work.
A large number of tenders received but with a wide range of experiences and
abilities, some being inadequate to meet the needs of the OPRC pilot.
Too many potential Tenderers from a wide spectrum of experiences and capabilities
(not necessarily road construction or maintenance related) has the potential to create
difficulties in effectively managing and running the Pre-bid workshop phase.
Feedback from the Industry Consultation Workshop #1 suggests that if the maximum
annual value of each contract is less than Rs 100 crore, then larger national or
international Contractors will be less interested in tendering. Based upon the
preliminary networks recommended under Task B1, it is reasonable to conclude that
8-00719.0A / A61NC
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the annual contract values will be of a size that will be more attractive to the local
contracting industry, than larger or more specialised Contractors.
There is the risk that larger or lesser experienced Contractors will still wish to submit
a tender, in which case any that are considered by the TET as failing to meet the
non-price attribute requirements would then have to be excluded during the Tender
evaluation phase.
The need to reject tender submissions and exclude Tenderers from further
consideration even though they have put in significant effort during the tender
process. This may potentially expose the Tender Evaluation Team (TET) and the
tender process for evaluation to a greater risk of legal challenges by those who may
have been excluded.
The risk of this can be mitigated by firstly ensuring those Contractors attending future
Industry Consultation Workshops are provided with sufficient information and handouts so
that they are well aware of the scope and nature of the work.
The number of Contractors interviewed as part of completing Task A4, along with the
interest displayed by these Contractors and those who attended the Industry Consultation
Workshop, suggests that there was already a reasonably high level understanding of the
OPRC concepts. Further awareness raising workshops planned prior to the advertising of
the pilot contract(s), will assist further in ensuring competitive market prices are received.
Secondly it is felt that the risk of any potential legal challenge to the decision of the TET to
reject a Tenderers submission can be mitigated by ensuring the requirements of the Tender
documents are both clear and concise, along with the application of predetermined scoring
criteria which is to be also included in the Tender documents.
8.1.2 Recommendation on Prequalification
Even though the general level of awareness of the OPRC concept appears to be good at the
local Contracting Industry level, there is still a degree of uncertainty as to the final mix of
potential Tenderers.
As securing the right Tenderer is seen as one of the critical success factors to the pilot, it is
recommended that the following pre-qualification steps be implemented:
(i)
Through both public and appropriate Industry specific notices a request to register an
Expression of Interest (EOI) from those wishing to tender. Sufficient background
information will need to be provided to all those registering an interest to ensure they
understand the over concept and nature of the work involved. The EOI would require
the following information to be submitted back to PRBDB within a prescribed
timeframe:
Name location and contact details
A brief outline of their background, relevant experience, resources and capability (a

capability statement)
8-00719.0A / A61NC
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(ii)
8.2
From the submitted EOIs the Client and Consultant would prepare a short list of
suitable Contractors who would be directly invited to tender for the OPRC pilot(s).
Proposed Tender Evaluation Procedure
To assist with ensuring a high level of Industry awareness is achieved prior to the commencement
of the public tendering, it is recommended that the following packages of information be made
available to all workshop attendees and any other potential Contractors who are known to be
interested prior to final tender advertising:
Location and maps of the network(s)
A basic schedule, descriptions and specifications covering the scope work to be undertaken
An indicative programme and annual quantities of work that is to be completed
A summary draft of the contractual arrangements, payment mechanisms and sample bidding
documents
An overview of the roles of the various parties
An outline of the tender evaluation criteria and procedures
To quantify the value of the quality attributes submitted by the Tenderers to the Client it is
recommended that an evaluation procedure is developed that will:
Separate the total evaluation score applied to each tender by the Tender Evaluation Team
(TET) into Price and a Non-Price (Quality) components. These two components will be assigned
an agreed weighting, e.g. Price 60%, Non-Price 40%.
Clearly identify non-price quality attributes that the Tenders must provide (separately from their
Price) for evaluation by the TET. These attributes would be assigned weightings to reflect the
value of their contribution to the overall non price score. An example of these non-price
attributes would be:
(i)
Details of 5 Relevant Projects
(ii)
Track Record performance on these 5 projects including nominated referee contacts and
supporting letters
(iii)
A detailed summary of Resources, including plant, employee numbers and management,

quality, safety and communication systems.
(iv)
Technical Skills of Contractors Key Personnel
(v)
A summary of the Management Skills of the Contractors key personnel.
(vi)
Methodology
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These attributes would be evaluated by the TET against pre-defined requirements. Examples of the
evaluation forms that could be used for these are illustrated below:
7.1 Relevant Experience (Attribute Weighting = 6%)
Factors
Relevance (60%)
35 or less: Not Related
40, 45: Barely Related
50, 55: Related
60, 65, 70: Particularly Related
75, 80, 85: Very Related
90, 95, 100: Extremely Related
Currency (20%)
Scale (20%)
(Years ago or % complete if under construction)
(% of estimate)
35 or less: >5 Years or < 50% Complete

40, 45: 45 Years or 50-60% Complete
50, 55: 3-4 Years or 60-70% Complete
60, 65, 70: 2-3 years or 70-80% Complete
35 or less: <35% of Estimate

40, 45: 5-50% of Estimate
50, 55: 50-70% of Estimate
60, 65, 70: 70-90% of Estimate
75, 80, 85: 90-100% of Estimate
90, 95, 100: >= Estimate
Project 1
Project 2
Project 3
Project 4
Project 5
Summary Rating
Tenderer:
Overall Relevant
Experience Rating
Evaluators Comments (Continue on Separate Sheet if Necessary)
Figure 5: Example Relevant Experience Attribute Scoring Form

7.2 Track Record - (Attribute Weighting = 3%)
Project
Performance
(includes Management, Production, Health & Safety and Administration)
35 or less: Unsatisfactory
40, 45: Needs Improvement
50, 55: Acceptable
60, 65, 70: Requirements Fully Met
75, 80, 85: Exceeds Requirements
90, 95, 100: Superlative
Project 1
Project 2
Project 3
Project 4
Project 5
Summary Rating
Tenderer:
Overall Track Record

Rating
Figure 6: Example Track Record Attribute Scoring Form
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Technical Skills (Weighting 10%)
Practical Experience (70%)
Key Personnel
Technical (30%)
Weighting %
(Formal Qualifications & Training)
Contract Manager
10
Contractors Representative
10
Senior field supervisor (Upgradation and
20
35 or less: Barely adequate

40, 45: Adequate
50, 55: Meets requirements
60, 65, 70: Related
75, 80, 85: Very Related
90, 95, 100: Directly Applicable
35 or less: Poor
40, 45: Below Average
50, 55: Average
60, 65, 70: Above Average
75, 80, 85: Good
90, 95, 100: Excellent
Rehabilitation)
field
supervisor
(Surfacing
20
Senior
field
Maintenance)
supervisor
(Routine
10
Senior
Renewal)
Environmental Personnel
10
Safety and Traffic Control Personnel
10
Quality Manager
10
Summary Rating
Technical Skills Rating
Tenderer
TET Note: Technical Skills relates to individuals, not the company, and should include technical skills of key
subcontractors if the positions listed are to be filled by subcontractors.
Figure 7: Example Technical Skills Attribute Scoring Form
7.4 Resources - (Attribute Weighting = 10%)

Factors
Equipment (40%)
Personnel (60%)
(Equipment and Facilities)
35 or less: Poor
40, 45: Below Adequate
50, 55: Average
75, 80, 85: Good
35 or less: Poor
50, 55: Average
75, 80, 85: Good
Pavement Construction
Asphaltic Cement Production
Asphaltic Cement Pavement and

Surfacing Construction
Drainage Maintenance
Routine Pavement Maintenance
Vegetation Control
Delineation and Pavement Marking
Routine Bridge and Structures Repair
Maintenance and Protection of the

RoW
Programme Management
Financial Management
Summary Rating
Tenderer:
Overall Resources Rating
Figure 8: Example Resources Attribute Scoring Form
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Management Skills (Attribute Weighting = 2%)
Organisational
Structure (10%)
Quality & Project

Management
Systems (25%)
Programming (20%)
Financial
Management (20%)
Health and Safety

(25%)
35 or less: Poor
50, 55: Average
75, 80, 85: Good
35 or less: Poor
50, 55: Average
75, 80, 85: Good
35 or less: Poor
50, 55: Average
75, 80, 85: Good
35 or less: Poor
50, 55: Average
75, 80, 85: Good
35 or less: Poor
50, 55: Average
75, 80, 85: Good
Summary Rating
Management Skills Company Systems Rating Carried Forward
Management Skills Weighting will be 60% Personnel & 40% Company Systems
Tenderer:
Overall
Management Skills
Rating
Figure 9: Example Management Skills Scoring Form

Methodology
(Weighting 10 %)
Standard
Weighting %
Factor
Management programming of routine

maintenance work including drainage
improvements
10
Design and construction of upgradation

works
15
Design and construction of pavement

rehabilitation work
15
Design and construction of surfacing

renewals
15
Management of the RoW
15
Management of Public Complaints
Financial management and reporting
QA (inc testing methodology

procedures to rectify test failures)
and
Management of Identified Risks
Co-operative work environment
Client Reporting and Liaison
(100%)
35 or less: Poor
50, 55: Average
75, 80, 85: Good
Summary Rating
Tenderer
Methodology Rating
Note for TET: Methodology relates to the proposed method of carrying out the Contract Works, and should
include methodology of key subcontractors where work is to be carried out by subcontractors.
Figure 10: Example Methodology Attribute Scoring Form
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Once all of the non-price attributes form all of the Tenderers submissions have been scored, these
values would be used to assign a monetary value or premium that reflects the additional value of
the Tenderers quality to the PRBDB and the GoP. This added value is typically referred to as the
Supplier Quality Premium (SQP) and is calculated by:
Tender SQP = Estimate x (Non Price Attribute Weighted Sum Margin/Price Weight)
The following spreadsheet illustrates an example evaluation of three Tenderers using this process:
Example Price Quality Method
Physical Works
Contract For: Punjab State Road Sector Project
Professional Services
Base Estimate (1)
Type Output and Performance Based

Contract No:
$325,000,000.00
Remove Provisional Sums (or any other Schedule fixed amounts in the RFT) from the Tender Prices and
Less all Schedule Fixed Amounts
$15,000,000.00 Estimate
Evaluation Estimate
$310,000,000.00
Please fill in the green fields only
Date:
ENVELOPE 1 Non-Price Evaluation
Tenderer
Weighting
Non-Price Tenderers Grades from Form F

Tenderer A
Tenderer B
Tenderer C
Tenderers Indices (Grade x Weight)

Tenderer A
Tenderer B
Tenderer C
5%
Relevant Experience
80.0
69.0
72.0
4.00
3.45
3%
Track Record
72.0
71.0
60.0
2.16
2.13
1.80
10%
Resources
75.0
70.0
65.0
7.50
7.00
6.50
10%
Technical Skills
83.0
65.0
70.0
8.30
6.50
7.00
2%
Mangement Skills
81.0
75.0
70.0
1.62
1.50
1.40
10%
Methodology
78.0
70.0
65.0
7.80
7.00
6.50
31.38
27.58
26.80
31.38
27.58
26.80
Non-Priced Attributes Weighted Sum

Price Weight
Lowest Weighted Sum
60%
Weighted Sum Margin

Supplier Quality Premium (SQP)
26.80
4.58
0.78
0.00
Each Tenderer's Weighted sum - Lowest Weighted sum
$23,663,333.33
$4,030,000.00
$0.00
Weighted Sum Margin x Evaluation Estimate / Price Weight
Final adjusted and justified SQP (or none)
Confirm SQP & record justification for any adjustments
Alternative Tender Premium (ATP)

SQP + ATP
ATP evaluation must be shown and recorded
$23,663,333.33
$4,030,000.00
$0.00
May not be altered once the price envelope is opened
TET's agreement on the calculated or adjusted SQP and ATP, and calculations verified correct:
Authorisation to open price envelopes:

Signature
TET Signature
Date
Date
PRBDB
TET Name
ENVELOPE 2 Price Evaluation
Tender Price
Less all Schedule Fixed Amounts
3.60
PWD
Opus
Tenderer's Full Name
334,000,000.00
328,000,000.00
$15,000,000.00
322,000,000.00
Tenderer A
$15,000,000.00
$15,000,000.00
Tenderer B
Evaluation Price
$319,000,000.00 $313,000,000.00
$307,000,000.00
Tenderer C
Adjusted Evaluation Price
$295,336,666.67 $308,970,000.00
$307,000,000.00
Lowest
Adjusted Evaluation Price is the Evaluation Price less the SQP and ATP. The preferred Tenderer is the Tenderer with the lowest Adjusted Evaluation Price
TET's agreement on the selection of the preferred tenderer and declaration that no conflicts of interest exist:
Authorisation to begin award process:

Signature
TET Signature
Date
PRBDB Director
Date
TET Name
Figure 11 Example Tender Evaluation Calculation of the Supplier Quality Premium
The SQP for Tender A in this example has been calculated as follows:
Weighted Sum Indice for Tenderer A
=
31.38
((0.05x80)+(0.03x72)+(0.10x75)+(0.10x83) (0.02x81)+(0.10x78))
Weighted Sum Margin for Tenderer A
(31.38 26.8 (Lowest Weighted Sum)) = 4.58
SQP for Tenderer A
($310,000,000 x 4.58) / (60% (Price Wt) x 100)
$23,663,333.33
In this example Tenderer A has submitted the highest tender price but has also received the highest
SQP value (which is then subtracted from the tendered price) and therefore has the lowest Adjusted
Evaluation Price. On this basis Tenderer A would therefore be awarded the contract.
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Contract Duration
There needs to be a balance between ensuring the Client does not feel un-necessarily bound by the
duration of the contract while at the same time the duration is long enough to provide the Contractor
with the confidence to invest in both plant and labour to the extent necessary to achieve the pilots
objectives.
In some cases road controlling agencies have perceived a risk that over the longer contract
durations (e.g. 10 years) they begin to feel that they have lost touch with the network and the
details of its operation. In addition to this there needs to be a high degree of stability over the level
of funding secured for the on-going maintenance inputs.
Long term LS performance contracts may also be perceived by some as being less flexible when it
comes to being able to accommodate inevitable changes in political directions or those brought
about by new legislation. From the Contractors view point this stability is probably seen as an
advantage and may work to the Clients long term benefit. The setting up of an effective CMB
combined with the opportunity for regular reviews over the way the contract is performing will
provide a mechanism to address any concern over the inflexible nature of the OPRC by either party.
The feedback received from the Contractors at the Industry Workshop No. 1 indicated a range in
duration from a minimum of 7 years to a maximum of 15 years. The assessment made, as part of
the legal review, of the implications of these contracts extending passed at least one electoral cycle
was that this should not create any undue difficulty, as these contracts are entered into by the
Government, and are therefore binding upon the State and not any particular elected party.
It is therefore recommended that, subject to agreement by the PRBDB, that the OPRC pilot contract
duration be assigned a maximum duration of 10 years. If a shorter duration is considered more
acceptable, then this should be no less than 7 years.
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10
Payment for Planned Upgradation Works
The conceptual designs prepared for the sections of the network identified for planned upgradation
will contain sufficient information to enable the Tenderers to price on a per m2 basis for their
construction. It is expected that there would be a separate rate based on whether the upgradation
was from an existing width of 3.05m to 5.5m, from 5.5m to 7.0m or from 7.0m to 10.0m.
It may be appropriate to also identify standard construction features such as culvert extensions,
retaining walls and safety improvement features as separate items for pricing as well. The
Contractor would, when submitting his final design for these works, confirm the quantity of
2
upgradation area (m ) along with the number of additional features to be constructed at the
scheduled rates. However the contract documents will need to be very clear that apart from the
separately identified features that may be paid for at the tendered rates, all other risks associated
2
with the construction of these planned upgradations must be included in the Tenderers per m rate.
8-00719.0A / A61NC
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52
11
Contract Format Related Issues to be Confirmed
Item Number
Issue
Comments
Risk Allocation and Mitigation
Full a full discussion of all relevant risks

and their mitigation is required under A8.
Identified Emergency Works Activities
A
comprehensive
list
of
probable
Emergency
Works
Activities
and
associated unit rates developed under Task
C3. The annual value of Emergency Works
to be carried by the OPRC Contractor
needs to be determined.
Pavement Design Life Parameters
Expected design life parameters for all

pavement designs need to be established
for the pilot network including an allowance
for overload conditions.
Road Safety Improvements
All conceptual designs must incorporate

identified Safety Improvement initiatives
and allowance made for their on-going
maintenance under the OPRC pilot.
Outcomes of Legal Review
Final report recommendations will be

subject to the outcome of the legal review
summary from Task A3
Outcomes of EIA and SIA review

6
Final report recommendations will be

subject to the outcome of incorporating the
EIA and SIA framework requirements from
Task A3
Maintenance of the PMGSY and A strategy for the maintenance of these

NABRAD scheme sections
sections needs to be agreed and approved.
Major
Non-Conformance
Score Field testing of the non-conformance
Triggering Payment Reduction
scores against prescribed performance
targets is necessary to determine an
acceptable tolerance level.
Payment
Details
Upgradation Works
9
for
Planned Following the development of the

conceptual designs and associated safety
improvements, the most appropriate
mechanism for payment will require further
discussion.
Table 5: Table of Related Issues
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References
(i)
Task A7: OPRC Industry Consultation Workshop #1 Summary Report

September 2008
(ii)
Draft Preliminary Report on Legal Issues Raised on the Procurement of Works

under OPRC
(iii)
Task A2: Preliminary Report on Contract Format for Output and Performance
Based Contracts for Roads: Technical Proposal Discussion Offer Item 4
Concerning Task A2: Financial Models to be used for Payment August 2008
(iv)
Task B1: Draft Report on Review Suitability and Selection of the OPRC Pilot
Areas October 2008
(v)
Task A4: Report on Confirmation of Contractor Capacity - October 2008.
8-00719.0A / A61NC
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Final Report On OPRC Format

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PUNJAB STATE ROAD SECTOR PROJECT

CONSULTANCY SERVICES AND PROJECT

PUNJAB STATE ROAD SECTOR

Opus International Consultants Limited

Napier, New Zealand

Opus International Consultants Limited 2008

+64 6 833 5100

+64 6 835 0881

Punjab State Road Project: Final Report on Contract Format

Executive Summary ............................................................................................................. 1

Extent of Assets to be Maintained. ..................................................................................... 9

End of Contract Residual Road Condition ....................................................................... 25

Financial Arrangements for Performance Guarantees ................................................... 31

Compliance Framework .................................................................................................... 34

The Tender Evaluation Procedures .................................................................................. 44

Contract Duration .............................................................................................................. 51

Punjab State Road Project: Final Report on Contract Format

Payment for Planned Upgradation Works........................................................................ 52

Contract Format Related Issues to be Confirmed ........................................................... 53

Punjab State Road Project: Final Report on Contract Format

End of Contract Residual Road Condition

Punjab State Road Project: Final Report on Contract Format

It is recommended that a Client funded programme of network wide pavement deflection

It is recommended that an acceptable distribution of pavement deflection values to be

Recommended Procedure for Joint Inspections Prior to Network Hand Back

Punjab State Road Project: Final Report on Contract Format

Financial Arrangements for Performance Guarantees

Punjab State Road Project: Final Report on Contract Format

To provide an appropriate level of tolerance to the Contractor failing to achieve full

Punjab State Road Project: Final Report on Contract Format

Any one of the performance

All other verified

Any other breach of the

30 Full Performance Payment is made

31 or more No performance payment is made .

Table 1: Proposed Table of Non-Conformance Scores and Payment Reductions

Punjab State Road Project: Final Report on Contract Format

Tender Evaluation Procedures

basic schedule descriptions and specifications covering the scope work to be

an indicative programme and annual quantities of work

summary draft of the contractual arrangements

proposed payment mechanisms and sample bidding documents

the roles of the various parties

Punjab State Road Project: Final Report on Contract Format

Summary Discussion on Contractor Capacity

Punjab State Road Project: Final Report on Contract Format

Punjab State Road Project: Final Report on Contract Format

Extent of Assets to be Maintained.

Bus/heavy vehicle rest stops

Road Right of Way (i.e. control and preservation)

Punjab State Road Project: Final Report on Contract Format

the industry capacity to maintain the assets

There were no negotiated amendments to this.

The ability to specify the nature of the maintenance work required

Reduce the potential for conflict between separate Contractors.

Enable an increased level of internal efficiency to be achieved by the Contractor by aligning

OPRC Consultation Workshop # 1 Summary Report

Punjab State Road Project: Final Report on Contract Format

Summary of Assets Recommended to be Maintained within the OPRC Pilot.

Pavement and Surfacing

Assessed Level of Risk in

Include in OPRC Pilot

Table 2: Summary of Assets Recommended for Inclusion