Implementation of Quality Criteria in Tendering and Regulating Infrastructure Management Contracts

Abstract

In recent years, several public authorities have been making advances in developing bidding terms for contracts regulating the management of infrastructure. Up to now these bidding terms have focused on granting the contract to the bidder who, having agreed to comply with the requirement of a specified level of quality, as stipulated in the contract, submits the lowest tender in terms of price. As a result, the experience of implementing quality-related incentives for the management of infrastructure has been scarce. This paper demonstrates that, if infrastructure quality is verifiable and the social benefit derived from it is measurable, there is a better way both to tender and to regulate those contracts, based on a combination of price and quality standards. In addition, the paper proposes a new procurement procedure to encourage bidders to provide better quality levels. The last part of the paper provides a practical example of how to calculate a quality index for contracts regulating the management of infrastructure. The paper ends with a set of conclusions related to the advantages of the new tendering mechanism and its possible application.