Foreign-funded Contract

The Japan International Cooperation Agency (JICA), World Bank (WB) and Asian Development Bank (ADB) are the major partners of the DPWH in its road sector development projects. Likewise, with the assistance of the World Bank, the DPWH has initiated the National Roads Improvement and Management Program (NRIMP) and plans to further enhance/improve the implementation of said program with the assistance and cooperation of JICA and ADB . The following are being adopted in the implementation of the NRIMP:

- Asset Management Approaches

- Long-Term Performance Based Maintenance (LTPBM) - Design-Build (DB) Contract

- Value Engineering

2.2.1 Asset Management Approach

The asset management approach is effective for sustainability of road facilities and services. Asset management can be defined as a “comprehensive and structured approach to the long term management of assets as tools for the efficient and effective delivery of community benefits” or “systematic process of effectively maintaining, upgrading and operating assets, combining engineering principles with sound business practice and economic rationale”. The priority is given to maintenance (preventive and routine maintenance) of the existing facilities rather than new construction as illustrated in the following figure:

Figure 2.1 Asset Management Approach

2.2.2 Long-Term Performance Based Maintenance

The ongoing LTPBM under NRIMP is a contract implementation method applying performance based specifications. The contractor is responsible for keeping road function and quality through maintenance for multiple years after construction. Performance characteristics may include end-result elements such as product strength, bearing capacity, stability, visibility, and crack-free, as well as more functional requirements such as smoothness, friction, noise reduction, chip retention, splash, and spray.

Under NRIMP, the contracts will be predominantly of the hybrid type including rehabilitation and structural overlays with the standard routine and preventive maintenance (both backlog and performance-based) interventions. Shoulder re-grading, side-slope maintenance, side and cross drainage structure cleaning and maintenance, and maintenance of road marking and roadside signs will be part of the performance-based phase. The rehabilitation, structural overlays and other backlog maintenance items to be undertaken in the first year of the contract will be paid on an item-rate basis, and the performance-based component will be paid on a periodic lump-sum basis in relation to specified performance standards and rectification.

(1) Scope of LTPBM Contract

The LTPBM projects under the Road Enhancement and Asset Preservation Management Program (REAPMP) are of a hybrid type, which includes a combination of rehabilitation, preventive maintenance, backlog maintenance, routine maintenance and road safety. Scopes of contract are as follows:

Table 2.1 Scope of LTPBM Contract

Rehabilitation Reconstruction will be applied to paved road sections which are assessed to be in bad condition. It also involves restoring them to their original condition as designed and constructed.

The major works include partial reconstruction, replacement of shattered concrete pavement slabs and Asphalt Concrete (AC) overlay (single or 2 layers) on the existing pavement. The works also include drainage, improvement and slope and scour protection works.

Preventive Maintenance

Asphalt overlay on paved road sections in fair and poor condition to improve surface condition and/or strengthening the existing pavement structures. Thickness of AC overlay will also be planned for roads in good condition as it is expected to deteriorate and subject to fair condition during 5-year contract period.

Backlog Maintenance Restoration of shoulders, reconditioning or provision of new drainage, and minor improvements such as localized slope protection.

Routine Maintenance Maintaining the road condition through routine repairs including pothole patching, sealing of cracks on pavement, shoulder grading, drainage cleaning, vegetation control, road markings maintenance and bridge maintenance.

Road Safety Road safety works include installation of road safety facilities (guard rails, guide posts, warning and information signs), road marking and public information.

(2) Performance Indicators of LTPBM

Performance standards/requirements represent the desired level of performance or output of the of Long Term Performance-Based Maintenace Enhancement (LTPBME) road link, in terms of quality, quantity, timeliness and other aspects of the output and service, against which the actual output will be measured and compared. The objectives of performance standards/requirements are (a) to satisfy the road users in terms of accessibility, comfort, travel speed and safety; (b) to minimize the total road system cost, including cost to road users and the DPWH over the life cycle cost of the assets; and (c) to minimize environmental impacts. The LTPBME roads should aim to achieve good to fair conditions only. The following table indicates road condition categories to be adopted for the LTPBM.

Table 2.2 Road Condition Category Road

Condition General condition Treatment Measure

Good

New pavement or with slight minor defects (pop-outs, map cracking, partial loss of joint

Little or no maintenance required.

First signs of cracks (all tight); First utility patch; moderate scaling in some locations.

Needs joint and cracking sealing (routine maintenance).

Fair

Moderate to severe scaling/raveling, spalling or rutting over 25% of the surface.

Moderate settlement, several narrow cracks

Needs some partial/full depth repairs grinding and/or asphalt overlay to correct surface defects.

Poor

Many cracks, open and severely spalled.

Severe faulting, spalling or rutting.

Extensive patching in fair to poor condition, Moderate settlement

Needs extensive full depth patching plus some full slab replacement (for concrete).

Bad

Extensive cracking severely spalled and patched (in poor condition). Severe and extensive settlements/potholes

Needs to rebuild pavement/total reconstruction.

Table 2.3 International Roughness Index and Road Condition Category

Road

Asphalt Concrete Cement Concrete Gravel

Range Rep. Value Range Rep. Value Range Rep. Value

The intervention IRI for the overlay should be defined based on a pavement deterioration curve reflecting the existing pavement strength and soundness, traffic level and function of the road. Even if the current road condition is good, it would require PM if it accommodates heavy truck traffic. The following table shows typical intervention pattern on LTPBM Road.

Table 2.4 Typical Intervention Pattern on LTPBM

*¹: Road Condition Category, Good, Fair, Poor and Bad

*²: Corresponding Rehabilitation and Maintenance Work

(RH: Rehabilitation, PM/O: Preventive Maintenance/Overlay, RM: Routine Maintenance)

(3) Design-Build (DB) Contract

The DPWH has recently introduced DB contract under the WB-financed NRIMP-I and II and will be enhanced under the road sector projects financed by JICA and ADB. The above LTPBM is a new project implementation scheme combined with the DB method as it is able to give the design and construction responsibility to the “Design-Build” Contractor. The preliminary design is still required for defining the project concept and cost for the DB contract bidding.

Many highway agencies have been experimenting with a wide variety of innovative project delivery strategies aimed at lowering the costs and time to produce highway construction and rehabilitation projects while maintaining or improving project quality. One of these strategies is the DB project delivery. DB is a method of project delivery in which the design and construction phases of a project are combined into one contract, usually awarded on either a low bid or best-value basis. This is in contrast to the more traditional Design-Bid-Build (DBB)¹ approach having been used in the DPWH that outsourced project design work, or conducted it by own administrative force. The two different contracting efforts must be undertaken in sequence to procure architecture/engineering services.

1 Design-Bid-Build: The DPWH conducts design of road project by Force Account or employing Consultant at first and procures civil works contractor through bidding. After that, the Contractor executes the project in

Section 17.6 of the Implementing Rules and Regulations - Part A (IRR-A) of Republic Act 9184 recognizes the use of design and build scheme in the procurement of infrastructure projects. The following table shows the general advantages and disadvantages of Design-Build Contract.

Table 2.5 Advantages and Disadvantages of Design-Built Contract

Advantages Disadvantages

- One Contractor bears all risks and responsibilities

- Reduced design and construction periods and final project cost

- Assured quality of the structure

- Too much discretion given to Contractor - Difficulty in predicting the final cost - The end –result may not exactly be in

accordance with what the procuring entity required

Source: Government Procurement Policy Board (GPPB)

The following figure shows sequence of project delivery activity by Contract Approaches, DBB and DB. It is generally said that the DB approach could save overall project implementation time compared with conventional DBB approach.

Source: GPPB

Figure 2.2 Sequence of Project Delivery (4) Value Engineering

Value Engineering is defined as the systematic application of recognized techniques by a multi-disciplined team to identify the function of a product or service, establish a worth for that function, generate alternatives through the use of creative thinking, and provide the needed functions to accomplish the original purpose of the project, reliably, and at the lowest life-cycle cost without sacrificing safety, necessary quality, and environmental attributes of the project.

More simply, it is defined as Value = Function / Cost

Value Engineering is a tool applicable in various stages of project development such as functional analysis, feasibility study and evaluation matrix (multi-criteria matrix). This is more effective in large and/or complicated projects but not for simple and small projects.