National Academies Press: OpenBook
« Previous: 1 INTRODUCTION TOPERFORMANCESPECIFICATIONS
Page 14
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 14
Page 15
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 15
Page 16
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 16
Page 17
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 17
Page 18
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 18
Page 19
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 19
Page 20
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 20
Page 21
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 21
Page 22
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 22
Page 23
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 23
Page 24
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 24
Page 25
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 25
Page 26
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 26
Page 27
Suggested Citation:"2 ORGANIZATIONAL CONSIDERATIONS." National Academies of Sciences, Engineering, and Medicine. 2013. Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers. Washington, DC: The National Academies Press. doi: 10.17226/22559.
×
Page 27

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

13 Unless an agency actively uses alternative project delivery methods such as design-build, its policies, procedures, and organizational structure will likely bear the imprint of years of near-exclusive use of method specifi cations implemented under the traditional design- bid-build delivery system. Over the years, this approach has provided taxpayers with an adequate, safe, and effi cient transportation facility at the lowest initial price that respon- sible, competitive bidders can offer. Accordingly, most agencies have structured their staff in a manner that will most effectively and effi ciently support the needs of this system. Distinct departments have been created to nurture skills and transfer and preserve knowl- edge in specifi c functional areas such as design, materials, construction, and maintenance. Standards and manuals have been developed to promote consistency and facilitate the immersion of new or less-experienced employees into the organization. Standard speci- fi cations and standard details allow much of the engineering and design work to be per- formed by junior staff, just as materials and construction manuals allow less-experienced inspectors to adequately assume quality assurance functions during construction. 2 ORGANIZATIONAL CONSIDERATIONS Chapter Objectives This chapter addresses the following questions: • How will the decision to use performance specifi cations affect traditional project development phases? • How can agencies help foster a culture in which performance specifi cations will be embraced by both internal staff members and industry?

14 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS Much of the institutional knowledge that allows the traditional system to flourish will not directly transfer to the implementation of performance specifications. Perfor- mance specifications require different skills, processes, and management and coordi- nation efforts for implementation to be successful. Fully integrating performance specifications into an agency’s toolbox therefore requires the development of a new organizational context that imposes new roles, responsibilities, and relationships. For such changes to take root, a concerted effort must be made to convince staff that a performance specifications initiative is worth pursuing. Otherwise, personnel may never truly commit to putting a performance specification strategy into action, and the implementation effort will likely fall flat. Fortunately, change management has been the topic of numerous research studies over the years, and best practices and lessons learned are covered extensively in the lit- erature related to management and organizational psychology. This chapter provides senior leadership with a roadmap for successfully introducing performance specifica- tions to their organization in a manner that will minimize staff resistance to change. HOW PERFORMANCE SPECIFICATIONS AFFECT PROJECT DEVELOPMENT PHASES To appreciate the challenges (and potential benefits) associated with performance spec- ifications, agencies must first understand how and why their implementation differs from that of method specifications. The following guidance traces how the decision to use performance specifications can affect various project development phases, from project planning and preliminary engineering through construction completion and possibly beyond to maintenance and asset management. First, the general process by which agencies have traditionally developed project plans and specifications is pre- sented for comparison purposes. Under the traditional system, an agency generally uses in-house design staff (or retains a consultant) to prepare 100% complete plans and specifications that fully define the contractor’s scope of work and project requirements. These design docu- ments are then used to procure contractors (typically on a low-bid basis) to build the project in strict accordance with the contract documents. The agency evaluates the bids received, awards the contract to the lowest responsible and responsive bidder, and, by virtue of the method specifications, retains significant responsibility for qual- ity, cost, and time performance. Developing a scope of work in terms of user needs and end-result performance is often much more challenging and resource intensive than simply adhering to the agency’s standard specifications. Project staff must have the knowledge, skills, and experience to craft a realistic performance measurement system that ensures the needs of the agency and other stakeholders will be met, without materially compromising the intended risk allocation strategy, stifling creativity and innovation, affecting value for money, or otherwise detracting from project goals. The following guidance is intended to help agencies identify where the implementation of performance specifications will likely require a departure from their standard project development process.

15 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS Early Project Development Deciding to Use Performance Specifications Incorporating performance specifications into an agency’s contracting toolbox requires modification of the agency’s traditional project planning and scoping efforts to include an evaluation of whether or not to use performance specifications. To the extent pos- sible, this decision should occur early enough in the project development process to preclude the need for a substantial de-engineering effort if performance specifications are to be used. While a decision as early as possible in project development provides greater potential for industry innovation under a performance specification to realize cost or time savings, performance specifications also have been successfully applied under a traditional contract delivery system or later in the project development process (e.g., using advanced measurement and testing methods, mechanistic properties). Many considerations factor into the decision of whether or not to use performance specifications, including the choice of project delivery method. The step-by-step selec- tion procedure presented in Chapter 5 can facilitate the decision-making process, but a cut-off score that automatically dictates or eliminates the use of performance speci- fications is difficult to define. Given specific project conditions or objectives, a single factor can override all others in determining the most appropriate choice for a specific project. Assigning a Project Development Team A multidisciplined team, including representatives from design, materials, construc- tion, and maintenance, should be assigned early on in the project development process not only to help with the selection decision, but also to provide assistance thereafter during the specification development and performance monitoring efforts. Unlike the implementation of traditional method specifications, in which individual team mem- bers may not be active during all phases of a project’s life cycle, projects on which performance specifications are used benefit greatly from the continued involvement of key personnel and information sharing across departmental lines. For example, the field construction representative will ultimately oversee construc- tion. That individual should participate in the specification development process to ensure that construction-phase issues (e.g., the quality management process, long-term maintenance considerations of possible design alternatives, maintenance and protec- tion of traffic) are given appropriate attention in both the specification itself and in the accompanying solicitation package (particularly if a best-value procurement process is used). Similarly, the engineers who participate in the preliminary design work and in the preparation of the specifications and solicitation package should remain involved after contract award to oversee and review any performance monitoring results— especially if performance parameters are intended to verify key design assumptions (e.g., pavement modulus). In addition to monitoring postconstruction performance, maintenance personnel should be consulted during specification development to help establish appropriate performance targets and thresholds given historical data from asset management systems.

16 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS Identifying Project Goals Understanding user needs and communicating clear and concise project goals are critical to the success of any project. Given the nature of performance specifications, articula tion of needs and goals takes on even greater importance because they set the foundation for the entire project development process. Decisions made with respect to performance measures, risk allocation, procurement approach, and project deliv- ery method all stem from the goals established at project inception. For example, if a project goal is to enhance innovation, the performance specifications should provide the contractor enough freedom to incorporate creative solutions, just as the selected contract delivery method and procurement approach should also help advance this goal to the extent possible. Early in the project development process, the project team, with input from other key stakeholders as necessary, should therefore develop and refine a list of project goals. Optimizing quality, time, and cost goals on a single project is rarely possible, so trade-offs may be necessary to ensure that the primary goal is achievable. Reaching a consensus on the relative importance of individual project goals will help the project team make informed decisions regarding the use of risk management and incentive strategies designed to increase the likelihood of achieving the primary project goal (e.g., enhanced quality), even if at the expense of secondary goals (e.g., cost). Design Phase Determining the Appropriate Level of Design The level of agency design is an important consideration when implementing perfor- mance specifications. If contractor innovation is a primary goal, the agency should perform only the level of engineering and design necessary to support the environ- mental process; advance right-of-way acquisition; and identify the full scope, needs, and technical criteria for the project in accordance with the risks to be allocated to the contractor. In general, the agency’s design effort should identify the project’s needs and objectives but not necessarily prescribe solutions. An appropriate parallel would be the level of design required for a design-build project. Agencies experienced in design-build contracting often report higher levels of project satisfaction with lower levels of preliminary design (with 30% often cited as a benchmark). However, that is not to say the same level of preliminary design should be applied to every project, or that every element within a single project should be taken to the same level of design. Each project, as well as each component of a single project, must be examined to determine the extent of preliminary or conceptual design needed to clearly convey the agency’s performance expectations. For certain project elements, defining performance requirements could require close to 100% design, whereas for others, very little design may suffice. Preparing Specifications and Solicitation Documents Although preparing a 100% complete design package may not be necessary, the agency will have to redirect some of its previous design efforts to the development of an appropriate performance measurement strategy. This process is described in detail

17 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS in Framework for Developing Performance Specifications. The effort will likely re- quire dedicated resources, beyond those typically required to develop conventional specifications, to collect and analyze systemwide performance data for use in setting performance target values and thresholds. Consideration will also have to be given to what contract documents need to accompany the performance specifications. The level of detail included in the plans and details should correspond to the flexibility extended to the contractor in the per- formance specifications. Inclusion or reference to an agency’s standard details may therefore be inappropriate. If a best-value or qualifications-based procurement process is contemplated, pre- paring the solicitation documents and evaluating the proposals received may also entail a significant effort beyond that traditionally performed by the agency. If the agency does not have the necessary expertise in-house, it may want to retain outside special- ists. For example, if implementing performance specifications under some variation of a design-build-finance approach, the agency should consider seeking outside financial expertise to ensure the public’s interests remain protected while it negotiates with a private entity that likely has significant experience in this area. Given the importance of the procurement step to successful implementation, Chapter 6 discusses various procurement issues and contract award considerations. Design Quality Management If performance specifications are implemented under the design-build approach, agency personnel will have to assume new design oversight responsibilities to ensure that the contractor’s design meets the intent of the contract documents. The agency’s oversight activities will generally include monitoring and auditing design progress and verifying compliance with contract requirements. In reviewing design submittals, agency staff should be careful about recommend- ing solutions to design problems. Any suggestions should be offered with the express provision that the contractor is not required to accept the suggestion. Requiring other- wise could result in the agency unintentionally assuming liability for aspects of the design that should remain with the contractor. Chapter 4 addresses the issue of owner interference in greater detail in the context of relevant case law. To foster a collaborative project development process, the agency may wish to consider colocating its key personnel with those of the contractor. Colocation is intended to facilitate regular interaction and the free exchange of information between the parties in a manner that helps accommodate the fast-paced nature of design-build and rapid renewal. Construction Quality Management Managing quality has traditionally been an agency responsibility. However, per- formance specifications provide the opportunity to expand the contractor’s role in construction quality management beyond conventional process control activities to include several of the quality assurance tasks traditionally performed by agency per- sonnel. Although this approach may represent a departure from the traditional manner in which agencies allocate responsibility for quality management, it is consistent with

18 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS the degree of risk assumed by the contractor for performance of the work. Too much oversight by agency personnel could shift significant risk back to the agency, as well as add time and inefficiency to the project—contradicting the goals of rapid renewal; too little oversight could compromise safety and performance. With the contractor assuming a larger role for quality management under a per- formance specification, agency inspectors will transition from performing continuous on-site inspections of the quality, performance, and quantity of the work to assuming more of a verification role. The latter involves performing duties such as the following: • Spot-check construction for compliance with design plans and project specifications; • Evaluate construction at any “witness and hold” points stipulated in the contract; • Verify that members of the contractor’s quality management staff — Have proper qualifications, — Are present to observe and control the work, and — Are carrying out the contractor’s quality management plan; • Perform verification sampling and testing of the contractor’s test data for accep- tance purposes; • Determine if acceptance should be at full or adjusted payment; • Verify progress and review payment requests; • Audit safety records; • Audit environmental compliance records; and • Conduct and manage the review of as-built plans. Although the contractor may assume a larger role for testing and inspection under a performance specification, responsibility for acceptance continues to reside with the agency. If contractor test data are used in the agency’s acceptance decision, the agency, or its designated agent (i.e., consultant under direct contract with the agency), must perform some level of independent verification sampling and testing to meet the intent of Title 23, Code of Federal Regulations, Part 637. Use of a third-party testing and inspection firm hired by the contractor does not relieve the agency of its responsibil- ity for verification. Likewise, splits of contractor-obtained samples cannot be used for verification purposes. Similarly, even if the performance specification includes postconstruction require- ments that effectively postpone final acceptance until the end of a warranty or mainte- nance term, the agency still should address initial acceptance at the end of construction to ensure that the contractor completed the basic scope of the work in accordance with the contract documents.

19 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS Best Practice in Construction QA: Michigan’s Construction Quality Partnership In 2004, the Michigan transportation construction industry, in partnership with the Michigan Department of Transportation (MDOT), Federal Highway Administration (FHWA), County Road Association of Michigan, and Michigan Municipal League, initi- ated the Construction Quality Partnership (CQP). The CQP is a comprehensive plan to improve quality by training and certifying all individuals, agencies, and companies that are involved in the design and construction of the transportation system in Michigan. The initiative entails a joint training and certification program for both owner/agency and contractor personnel. Training is targeted to three organizational levels: • Strategic—for corporate/executive management; • Technical—for project engineers and managers; and • Hands-on—for labor and inspection personnel. The side-by-side nature of the training allows agency and industry personnel to gain appreciation for the contribution each entity makes to ensuring quality, facilitating sub- sequent interactions on the job. The goal of the program is to change the way agency and industry personnel think about quality by expanding it beyond traditional materials testing. Construction practices must reflect the fact that operations such as mixing and placing materials have as great an effect on performance as does the quality of the individual materials. Through state-of- the-art personnel training in the areas of project development, construction processes, inspection, and equipment operation, the CQP aims to instill a focus on quality and con- tinuous improvement in all individuals involved on transportation construction projects. Once the training program is fully implemented, the plan is to develop corporate certifi- cation criteria that require contractors and consultants seeking work on MDOT projects to establish a corporate quality program. The ultimate vision for the CQP is to include a postconstruction review process that pro- vides a feedback loop to support continuous improvement efforts. With time and the commitment of agency and industry leaders, the Michigan CQP initia- tive can be replicated in other locations to ensure that personnel are properly trained and equipped to deliver projects of the highest quality.

20 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS Postconstruction Performance Monitoring for Warranties and Operation-Maintenance Agreements Implementing performance specifications that assign postconstruction responsibility to the contractor (e.g., through warranties or maintenance agreements) does not diminish the agency’s responsibility to the public to provide a highway facility that performs to the desired level of service. Even if such agreements were to transfer all maintenance and repair activities to the contractor, agency personnel would still have to assume manage- ment and administrative duties to monitor and verify contractor performance during the operation and maintenance period. Depending on the length of the post construction period and the project goals, agency responsibilities may entail the following: • Auditing and review of documentation, reports, self-appraisals, and performance data submitted by the contractor; • Performance monitoring to ensure the facility continues to meet the specified per- formance requirements. Depending on the length of the postconstruction period, this could require formal condition surveys (ideally conducted using high-speed methods comparable to the agency’s standard network-level asset management system), as well as more informal “windshield” surveys; • Analysis and interpretation of performance data; • Assessment of pay deductions (or penalty points) if the facility fails to meet per- formance standards and the contractor does not respond with the appropriate remedial action within the prescribed time frame (primarily for long-term mainte- nance agreements); • Issuance of work permits and assessment of lane rental fees when the contractor needs to take lanes out of service to perform maintenance or repair work; • Handback inspections before the end of the contract term (particularly for long- term operations and maintenance agreements); and • Final acceptance and project closeout activities at the end of the warranty or main- tenance term. Given the administrative burden that accompanies these responsibilities, interested agencies should develop a performance monitoring plan and dedicate staff resources at the program level before applying postconstruction performance agreements on a widespread basis. A comprehensive monitoring program is essential to ensuring all per- formance objectives are continually met. For example, a computer-automated system to alert contract managers of the need to perform a monitoring event would alleviate some of the burden on individual contract managers to recall the timing of inspec- tion events or other contract triggers. Such a system would be particularly helpful if the contractor’s postconstruction responsibilities extended several years and over- lapped with turnover in agency staff assignments. The implementation plan should also address which department (e.g., construction, materials, contract administration, maintenance, innovative delivery) has primary responsibility for postconstruction oversight and monitoring duties. Most likely, additional management and coordina- tion across departments and field divisions would be needed to verify and manage

21 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS contractor compliance throughout the contract period. To help streamline the collec- tion and analysis of performance data, the agency should consider initially applying the same approach (e.g., similar performance parameters and data collection methods) it uses under its standard asset management system. FOSTERING A PERFORMANCE-BASED CULTURE The most critical element of implementing anything new—performance specifi cations included—is the ability to manage the change within the organization to ensure that personnel understand both the need for the change and the benefi ts it will provide. As already discussed, successful implementation of performance specifi cations will likely require a departure from traditional project development and delivery processes. To foster a culture in which such changes will be embraced requires, at a minimum, acknowledgment from senior management that performance specifi cations could have a signifi cant effect on the agency’s workforce. Figure 2.1 adapts the process presented in John Kotter’s seminal work on change management, Leading Change, to the steps needed to integrate performance specifi - cations into an agency’s standard operating procedures (Kotter 1996). The actions needed to progress through each step are summarized in Table 2.1, as are the potential pitfalls that could hinder the initiative. While designed as a sequential process, fl exibil- ity in how it is implemented is clearly possible. The fi rst and last steps—“establish the need” and “institutionalize change”—would not change, but interim steps (e.g., “com- municate a vision” and “form the right team”) might be accomplished concurrently or in a different order. Each step is further described in the narrative that follows. FIGURE 2.1 TABLE 2.1 Step Actions Potential Pitfalls Establish  the  need.    Compare  network  needs  to  available   resources  to  determine  if  performance   specifications  would  provide  a  better   means  of  achieving  organizational  goals   than  would  traditional  method   specifications.    Continually  champion  the  development   and  use  of  performance  specifications  for   appropriate  projects.    Lack  of  executive  involvement   Figure 2.1 Steps to integrate performance specifi cations into an agency’s operating procedures.

22 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS Establish the Need Strong endorsement from upper management can help garner broad employee support for the changes needed to fully deploy performance specifications on a programmatic level. To gain such support, best practice suggests first establishing the specific rationale as to why performance specifications represent a necessary addition to an agency’s con- tracting toolbox. For example, the literature suggests that implementing performance specifications has the potential to improve quality and long-term durability, encourage innovation, accelerate construction, and reduce an owner’s quality assurance burden during construction (particularly if the contractor has post construction responsibili- ties). If a comparison of network needs to available resources suggests that perfor- mance specifications would provide a better means of achieving an agency’s strategic goals than traditional method specifications, a greater sense of urgency can be created regarding the implementation effort. Without such an underlying rationale for change, people may not be inclined to alter their habits to implement what they may otherwise perceive to be an executive whim to experiment with new processes. Creating a sense of urgency regarding why a change initiative provides the right solution for a particular problem tends to be more motivating than simply issuing a top-down command. Develop and Communicate a Vision for Using Performance Specifications People are generally reluctant to alter their habits. In the absence of a compelling reason to change, staff will continue to do what they’ve always done and will strive to retain the processes that are familiar to them. Once the need for performance speci- fications is established, the agency should communicate this need through a clear and concise vision statement. The vision statement should serve to both motivate individuals and ensure everyone is working toward a common goal. For example, an agency with minimal resources to devote to construction inspection may wish to communicate that performance specifi- cations will allow the agency to do more with less by empowering industry to assume more responsibility for quality and performance. Similarly, an agency that is more interested in innovation may wish to focus on the idea of capitalizing on the expertise of the private sector. Achieving buy-in from industry also is critical to the successful implementation of performance specifications. Although performance specifications impose greater risk on contractors, they also offer the opportunity for increased profit margins should contractor-initiated design, process, or technology innovations yield improved effi- ciencies or cost savings. This concept may require tailoring a message to focus on the benefits that performance specifications can bring to industry while also offering assur- ances that opportunities for smaller or local firms will not disappear. Form the Right Team Assembling a multidisciplined team of individuals who are willing to move past tra- ditional silos of responsibility is a key element of a successful implementation strat- egy. One approach used by several agencies is to set up a special projects group (or

23 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS TABLE 2.1. NECESSARY ACTIONS AND POTENTIAL PITFALLS IN IMPLEMENTING PERFORMANCE SPECIFICATIONS Step Actions Potential Pitfalls Establish the need. • Compare network needs to available resources to determine if performance specifications would provide a better means of achieving organizational goals than would traditional method specifications. • Continually champion the development and use of performance specifications for appropriate projects. • Lack of executive involvement Develop and communicate a vision for using performance specifications. • Engage internal and external stakeholders with a compelling message as to how performance specifications would add value to an agency’s contracting “toolbox.” • Lack of a simple and concise vision as to how performance specifications can help fulfill an agency’s need(s) • Inability to communicate the vision • Failure to achieve industry buy-in • Behavior contrary to the vision (e.g., using performance specifications indiscriminately, not allowing industry sufficient flexibility) Form the right team. • Assemble a cross-disciplinary team that is willing to modify the agency’s traditional processes to accommodate the use of performance specifications. • Failure to get past traditional silos of responsibility (e.g., between design and construction, pavement and geotech) • Failure to tap the right people to develop and implement performance specifications Empower others to act on the vision. • Remove obstacles that would undermine efforts to implement performance specifications. • Recognize that traditional project development phases may require modifications to realize the benefits of performance specifications. • Failure of senior leadership to remain involved in the performance specification initiative and to remove obstacles to its successful implementation • Underestimating how the use of performance specifications can affect an agency’s workforce and standard project delivery processes • Underestimating organizational inertia and the difficulty of pushing people out of their comfort zones Develop an action plan and include milestones for short-term achievements. • Identify goals and objectives of the implementation effort. • Conduct trial projects or demonstrations. • Failure to set realistic expectations • Failure to adequately account for the learning curve that people (both internal staff and industry) must navigate before understanding and mastering a new process or technology Institutionalize performance contracting. • Identify and communicate benefits of using performance specifications. • Add performance specifications to the agency’s contracting “toolbox.” • Failure to formalize new procedures • Lack of patience related to realizing the benefits of performance specifications

24 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS Today, the United Kingdom (UK) Highways Agency is a leader in the use of performance specifications and alternative contracting strategies that place more responsibility for quality and performance on industry. This development came largely in response to a series of targeted government initiatives aimed at addressing per- ceived problems with the UK’s construction industry as a whole. In the mid-1990s, government leaders—encouraged by productivity gains achieved in the manufacturing industry through the introduction of lean production tech- niques—sought ways to attain similar results in the construction industry. At the time, the construction industry was generally viewed as underperforming with respect to customer satisfac- tion, capital investment, research and development, training, and commitment to safety and quality. These failings often led to adversarial relationships with owners, cost overruns, and extended project durations. To identify how to best fix those problems and modernize its construction industry, the UK first focused on identifying what was broken. Key findings from early government-sponsored research included the following (Egan 1998, 2001): • The rate of profitability in construction was too low and unreliable to induce contractors to make sustainable investments in capital improvements, research and development, and training; quality and innovation often suf- fered as a result. • Owners equated price with cost and did not differentiate between best value and lowest price. Furthermore, competing all work, instead of creating longer-term relationships with industry partners, inhibited learning, inno vation, and development of skilled and experienced teams. • Too many independent construction firms and subcontractors had fragmented the industry, hindering team continuity and performance improvement. • Contractors had no stake in the long-term success of the project and were not accountable to the end user. Instead, contractors focused on the next client and the next job. Recommended solutions to address the perceived deficiencies included the following: • Create a culture of partnership—both between owners and contractors and among designers, subcontractors, and the supply chain—to enable the team to learn and make incremental improvements over time to improve long-term efficiency. • Focus on the end products and the needs of the end user. • Set targets for performance and continual improvement. • Select partners on the basis of best value, not lowest price. Such findings and recommendations laid the groundwork for the UK’s plans to improve the quality and efficiency of its construction industry. The Highways Agency, which by the late 1990s was already outsourcing a significant portion of its design, construction, and maintenance work (albeit to separate entities), was receptive to the recommendations. Establishing a Sense of Need: United Kingdom Highways Agency

25 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS alternative delivery office) to develop staff experience and provide leadership and sup- port related to nontraditional contracting practices. Training and continued support from senior managers can also help reinforce any changes in traditional roles and responsibilities and standard operating procedures needed to accommodate perfor- mance specifications. Empower Others to Act on the Vision Once a vision for performance specifications has been communicated and a team has been established to act on the vision, senior managers should remain engaged to ensure that the initiative moves ahead with minimal obstacles. For example, manage- ment needs to remain actively involved to determine whether the chosen team has the necessary knowledge, skills, and resources to implement performance specifications as intended. As addressed earlier, some modifications to traditional processes may be necessary to realize the benefits of performance specifications. Likewise, organizational structure may need to change to eliminate barriers to successful implementation of performance specifications. Narrow divisions of work can reinforce traditional silos and undermine efforts to develop comprehensive performance specifications that have the road user in mind. Another obstacle may be related to equipment and technology. Advances in non- destructive testing techniques may ultimately allow agencies to incorporate acceptance parameters that better reflect the future performance and design life of the facility. However, new technologies are often difficult to absorb into daily practice. To ensure an adequate return on investment, agencies should develop an implementation and roll- out plan to shepherd new technology into routine use. Such a plan may require new information technology infrastructure to manage large quantities of electronic data and a learning curve for staff before the full potential of the new technology can be realized. Develop an Action Plan and Include Milestones for Short-Term Achievements To avoid discouragement, agencies should acknowledge that successful implementation of performance specifications will not occur overnight. Agencies may have to devote considerable time and resources to collecting the historical data needed to establish rea- sonable performance targets and tolerances. Investment in new technologies and infor- mation systems also may be necessary to support all of the performance parameters that the agency wishes to implement. Likewise, agencies need to appreciate the impact that performance specifications will have on industry. Agencies should collaborate with industry during the specifi- cation development process and encourage contractors to invest in state-of-the-art equipment and construction process control. Quite often contractors need to make an initial investment to acquire the necessary knowledge, skills, and equipment to assume more responsibility for performance. One way to ease this transition is to gradually phase in the use of performance specifications over time, starting with demonstrations and pilot projects before expanding to a more widespread programmatic level.

26 STRATEGIES FOR IMPLEMENTING PERFORMANCE SPECIFICATIONS: GUIDE FOR EXECUTIVES AND PROJECT MANAGERS Time also may be needed for the benefits of performance specifying to become apparent. Initially, the agency may receive higher bid pricing because of contractor uncertainty regarding the risks involved. As industry grows more familiar with per- formance specifications and comfortable with its ability to manage the risks, some contractors may actually see a competitive advantage to using performance specifi- cations—an advantage that can be passed onto the agency in the form of lower bid pricing. Institutionalize Performance Contracting As with any new process, internal and external stakeholders must be educated about the potential benefits of performance specifications. A powerful way to communi- cate this message is through the successes and lessons learned from demonstration projects. In relating this information, agencies should make a conscious attempt to convey exactly how the use of the new specifications helped improve performance. If people are left to draw their own conclusions, they may not make the right associa- tions. For example, people might think a project succeeded because it was performed by a contractor’s “A” team working together with the agency’s most seasoned resi- dent engineer, and not because the project’s performance specifications helped promote inno vation and quality-conscious behavior. Project successes and lessons learned should then be translated into formal proce- dures that provide agency-specific guidance related to the development and implemen- tation of performance specifications.

Next: 3 INDUSTRY CONSIDERATIONS »
Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers Get This Book
×
 Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers
Buy Paperback | $58.00
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

TRB’s second Strategic Highway Research Program (SHRP 2) Report S2-R07-RR-2: Strategies for Implementing Performance Specifications: Guide for Executives and Project Managers is designed to provide a broad overview of the benefits and challenges associated with implementing performance specifications. The guide explores various cultural, organizational, and legal considerations that can affect the successful implementation of performance specifications. Project selection criteria and procurement and project delivery options are also addressed.

The SHRP 2 Renewal Project that produced Report S2-R07-RR-2 also produced:

  • Framework for Performance Specifications: Guide for Specification Writers, which presents a flexible framework that specifiers may use to assess whether performance specifying represents a viable option for a particular project or project element. If it is indeed a viable option, the Guide discusses how performance specifications may then be developed and used to achieve project-specific goals and satisfy user needs;
  • Performance Specifications for Rapid Highway Renewal, which describes suggested performance specifications for different application areas and delivery methods that users may tailor to address rapid highway renewal project-specific goals and conditions; and
  • Guide Performance Specifications, which includes model specifications and commentary to address implementation and performance targets (for acceptance) for 13 routine highway items. Agencies may adapt guide specifications to specific standards or project conditions. The commentary addresses gaps, risks, and options.
  • A pilot study, in partnership with the Missouri Department of Transportation, to investigate the effectiveness of selected quality assurance/quality control testing technologies.

READ FREE ONLINE

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!