Life-Cycle Cost tenders for infrastructure projects

In the past decade contracts for civil works have changed rapidly Whereas traditional contracts contain detailed descriptions of the contractors work, more modern contracts aim at describing the desired result (or functionality) based on the principles of system engineering, leaving the contractor free to decide how to reach the desired result. Typical forms of modern contracting are DC (design and construct), DCM (design, construct and maintain) and DCFM (design, construct, finance and maintain). The last two types of contracts typically aim at a shared risk between owner and contractor after construction. However, these types of contracts often don't have a long enough maintenance period to really cover the financial risks in time. DC contracts (and in practice DCM contracts likewise) do not stimulate the contractor to think about lifecycle cost aspects. At the Dutch Ministry of Transport, Public Works and Water Management (Rijkswaterstaat) a new approach for tendering DC contracts has been developed: the "LCC tender". Not the lowest bid, but the lowest lifecycle cost will be used (as one of the criteria) to determine the economical most advantageous proposal. In this paper different "fit to purpose" approaches are described for LCC tenders for the construction of new bridges and roads, new "complex structures" and renovation projects. All three types of tenders are currently being put to practice or ate under development at Rijkswaterstaat.