Network outcomes contracts

NZ Transport Agency Waka Kotahi (NZTA) has moved away from the previous approach of utilising a range of different contract models in the maintenance business.

Having reviewed its asset management practices and procurement procedures for state highway maintenance and operations expenditure NZTA introduced a number of changes to its existing procedures to obtain greater value for money and improved customer satisfaction.

The key changes introduced by NZTA include:

• Network outcomes contracts, which see NZTA take a more hands on approach with respect to strategic asset management and contract management.
• Increased contract tenure subject to supplier performance.
• Increased bundling of contract scope by type of activities and geographic area.
• Network outcomes contracts which are performance based using key performance indicators to ensure desired outcomes are achieved.
• Requirement for a minimum proportion of works undertaken by subcontractors, average annual turnover.
• The establishment of a network outcomes team in the National Office to deliver better strategic asset management and nationally optimise investment across all state highway activities.

The Network Outcomes Contract (NOC) delivery is now almost exclusively used throughout the state highway network.

The core maintenance activities covered by the NOC include:

• Network management – asset management, journey management and safety management.
• Physical works – maintenance and renewals of sealed pavement, drainage and structures, environmental maintenance, traffic services and operational traffic services.
• Other network specific maintenance activities (eg tunnels) and local roads can be included as required.

The NOC provides for collaboration between NZTA and suppliers to achieve positive network outcomes. The performance framework, contract risk profile and management plans have been designed to bring the contractors practices and decision making processes into line with NZTA goals and objectives for state highways.

A key driver of the NOC is continuous improvement. To ensure transparency, learnings and clarifications are captured this NOC discipline has been developed as a single source of relevant information.

For further information contact SDDNetworkOutcomesContractCGG@nzta.govt.nz