Title: Innovative contracting and the need for dynamic adaptive standards in the asset management of transportation infrastructures

Authors: Mónica A. Altamirano; Paulien Herder; Juha Äijö

Addresses: Deltares, Rotterdamseweg 185, Boussinesqweg 1, 2629 HV Delft, Postbus 177, 2600 MH Delft, the Netherlands ' Faculty of Technology, Policy and Management, Delft University of Technology, Jaffalaan 5, Delft, the Netherlands ' Ramboll Finland Oy, Säterinkatu 6, Fi – 02600 Espoo, Finland

Abstract: High expectations are placed in the new asset management paradigm. Nevertheless, asset management should not be seen as a 'solution' but rather a tool that holds promise to improve decision-making through the proper identification of trade-offs. This paper aims at illustrating some of the key trade-offs faced by owners of transportation networks that combined with the shift towards innovative contracts make the need of dynamic adaptive standards urgent. The new contracting paradigm means a shift from directly exerting control over works of private agents, to indirectly managing them through a set of contract incentives. Innovative contracts are often seen as resulting in lower flexibility for public clients and limited possibilities for changes in standards during their duration. The use of dynamic decision-support tools for the setting of performance standards enforced in contracts could solve this dilemma. There is evidence to suggest that system dynamic models are suitable for the handling of long-term (dynamic) contracts.

Keywords: contracting; public infrastructure; roads; decision making; procurement; system dynamics; dynamic contracting; relational contracting; dynamic standards; adaptive standards; transport infrastructures; performance standards; modelling; highways.

DOI: 10.1504/IJSEAM.2015.075415

International Journal of Strategic Engineering Asset Management, 2015 Vol.2 No.4, pp.395 - 413

Published online: 22 Mar 2016 *

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