1 Finnish Road Administration s Strategy for Procurement of Road Maintenance Jukka Karjalainen Finnish Road Administration (Finnra) 25th International Baltic Road Conference 24-27 August 2003, Vilnius, Lithuania
Basis - Finnra s Vision Finnra has the best procurement practices in the infrastructure market 2 Good quality (for roadusers, customers) Economically (for Finnra, society) Reasonable profit (for contractors)
3 Implementation of Road Maintenance Road maintenance of public roads is contracted out entirely Maintenance is mostly executed in the form of area maintenance contracts Road Administration specifies works and desired quality Contractor organizes the work, chooses the procedures and has also responsible of quality control
4 STRATEGY FOR PROCUREMENT OF ROAD MAINTENANCE Goal 2007 More extensive, long-term contracts which make it possible to benefit from contractors innovations and are more economical for the client. The desired outcome of the level of service is achieved by specifying outcome-based requirements and condition standards for end products.
Development of Maintenance Procurement 5 Small Investments Area Maintenance Contracts Duration increases Long Term Integrated Area Maintenance Contracts Other Periodic Maintenance & Improvements Separate Maintenance Contracts
6 PURCHASING OF ROAD MANAGEMENT PRODUCTS AS SERVICE ENTITIES PRE- PLAN- NING FINANCE GENERAL DESIGN DETAILED DESIGN CONST- RUCTION MAINTE- NANCE AND REPAIR DAILY MAINTE- NANCE Long-term integrated area maintenance contract INVESTMENTS - Repair of gravel road base damaged by frost (experim.) Individual repairs of paved roads Other small investments e.g. traffic safety MAINTENANCE - Ditch maintenance - Culvert repair and renewal Renewal of railings, fences permanent traffic control devices, curbs and rest area facilities Individual repairs of road structure DAILY MAINTENANCE - Winter maintenance - Maintenance of traffic surroundings - Maintenance of structures and facilities - Gravel road maint. Road lighting? Road markings? Products in black are included in current area maintenance contracts.
7 DEVELOPMENTAL STEPS OF AREA MAINTENANCE CONTRACTS CURRENT AREA CONTRACT LONG TERM INTEGRATED AREA MAINTENANCE CONTRACTS Frost damage experiments 3-5-7 years 3-5-7 years United larger 3+2, 5+2 opareas tions Content Frost damage expansion, repairs Road markings? Road markings experiments 3-5-7 years United larger areas Content expansion Road markings? 7-year contracts Contend expands in the direction of investments 2002 2003 2004 2005 2006
Tenders Evaluation and Selection Criteria 8 Area contracts; overall economy (two envelope method), importance of quality remains or even increases. Separate contracts; from the cheapest contract price to the most economical service life cost
9 Quality Assurance Contracts are service agreements based on the principle of quality responsibility The client primarily monitors the functionality of the contractor s quality system Bonus on the basis of customers, road users, satisfaction is studied
Critical Success Factors Can functional markets be created? Will new co-operative operating procedures be created between different parties? Is the possibility of benefiting from innovativeness increased? NCC Roads Oy Rakennusliike Karjaluoto Oy Savon Kuljetus Oy Skanska Asfaltti Oy Traktoriurakointi Veljekset Määttä YIT Rakennus Oyj Tieliikelaitos Ivalo Kittilä Sodankylä Pello Kemijärvi Rovaniemi Kemipohjoinen Kemieteläinen eteläinen Ii Oulu Raahe Posio Ranua Kuusamo Taivalkoski Pudasjärvi Suomussalmi Puolanka Vaala? 10? Pulkkila Kajaani Kuhmo Kokkola Ylivieska Pietarsaari Pyhäjärvi Kiuruvesi Iisalmi Oravainen Veteli Nurmes Vaasa Nilsiä Alajärvi Pihtipudas Pielavesi Juuka Lapua Kristinankaupunki Karstula Suonenjoki Kuopio Viinijärvi Ilomantsi Seinäjoki Alavus Suolahti Joensuu Koskenkorva Leppävirta Kauhajoki Keuruu Jyväskylä läntinen Virat Kitee Parkano ano Pieksämäki Merikarvia Jyväskylä Kankaanpää Jämsä itäinen Orivesi Juva Savonlinna Mikkeli Pori Tampere Kangasala Heinola Harjavalta Imatra Huittinen Padasjoki Savitaipale Laitila Hämeenlinna Pöytyä Forssa Kouvola Lappeenranta Lahti Raisio Lieto Riihimäki Somero Mäntsälä Loviisa Nummi Hyvinkää Kotka Salo Porvoo Paimio Karjaa Vantaa Espoo Tammisaari?