Towards Key Performance Indicators for Maintenance Strategies of Integrated Contracts
Jeroen van der Meer
February 2011 – August 2011
Infrastructural projects are more often being put out to tender as integrated contracts instead of RAW-contracts. During the tender, construction companies come up with a high variety in costs. This is a rather strange situation because the profit margins are narrow in the construction industry. It alludes to a situation where construction companies do not have a clear idea about the expected costs and the way the costs can be controlled. They are forced to make a rough estimation about the life cycle costs based on no past experience.
In the Dutch building industry little information is available to make a cost-estimate for those integrated contracts. The difficulty is to make an estimate about the cost for the upcoming 20 years of construction and maintenance. Many firms make assumptions based on their RAW-contract experience, in which every technical aspect is prescribed. Next to this, the contract is designed for a specific construction phase. Due to this situation there was no incentive to be innovative or gather knowledge about the life cycle of projects. By contrast, the current change towards integrated contracts makes it necessary to obtain this information. As a result construction companies can increase profit if they improve their performance by developing new technologies, understanding of the processes that influence the project or by improving their accuracy of cost estimates.
It is difficult to design a maintenance strategy that is optimal for the upcoming years (>15 years) of maintenance. The ever changing environment makes it necessary to design a flexible maintenance strategy. Moreover, the more frequently use of integrated contracts makes this situation a strategic issue for construction companies. Therefore, the aspects that need to be controlled to be able to influence the maintenance strategy during the maintenance stage for integrated projects are proposed as the central problem of this research project.
The objectives of this research is to identify the aspects that influence the maintenance costs of integrated contracts and which measures can be taken to optimize the maintenance strategy. This will eventually lead to the identification of process-based Key Performance Indicators (KPIs) for the BAM that need to be controlled to optimize the maintenance stage.