THE EVOLUTION OF HIGHWAY MAINTENANCE OUTSOURCING IN ALBERTA

In 1995, Alberta Transportation and Utilities (AT&U) took its first steps of many to outsourcing the highway maintenance work. The task at hand was not easy, everything from deciding on the type of contract, lump sum versus unit price, to developing maintenance specifications and contractor selection process had to be done in a relatively short time frame. In the end, the department overcame the challenges and in 1996 a new industry emerged in Alberta. The first set of maintenance contracts were for a five year term. From day one, the industry and the department began to work together on forming a relationship of understanding. The working relationship was structured to draw on the strengths of each party to identify and achieve common goals. This relationship was referred to as “Partnering” and it would prove to be beneficial in future contracts. Before the midway point of the first set of contracts, the department began preparations for the second round. In 1998, maintenance contractors were provided the opportunity to extend their existing contract through a competitive extension process and a few of them were successful in doing so. Immediately following the extension process, the department along with the industry undertook a thorough review of all the maintenance specifications and contract requirements in an effort to identify the risk and place it where it could be best managed. While this was taking place, the department started the process of selling off its maintenance shops which were currently being leased to maintenance contractors. As well, the Alberta Government also passed legislation in 2000 which gave the government full responsibility of the secondary highways plus key highways through cities effectively doubling the highway network to be maintained by the department. All of these changes were incorporated into the contracts prior to the second round of re-tendering. The department expected some savings from the first round and was quite pleased with the results when the re-tendering was complete. There were significant savings from the first round. The department is now about to embark on its third round of re-tendering. Maintaining a level playing field for all contractors, creating a competitive atmosphere, dealing with increased public expectation and issues on environment and insurance are just a few of the items that are being looked at in this round. However, the department is confident that it has taken the necessary course of action to ensure the highway maintenance outsourcing in Alberta continues to be a success.