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Quality tendering and contracting service design

Quality tendering and contracting service design. Comparing the Dutch and Norwegian initiatives Frode Longva, and Bård Norheim Institute of Transport Economics flo@toi.no bno@toi.no. Objective of the presentation/research.

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Quality tendering and contracting service design

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  1. Quality tendering and contracting service design Comparing the Dutch and Norwegian initiatives Frode Longva, and Bård NorheimInstitute of Transport Economicsflo@toi.no bno@toi.no

  2. Objective of the presentation/research • Develop a new contracting and tendering regime in Telemark County Norway • Based on international experiences • Adopted to Norwegian reality • Within a rapidly changing environment

  3. Competitive tendering and freedom in service design at the tendering stage

  4. Various forms of quality tendering

  5. Temporary conclusions on quality tendering • Several innovating and promising ways to introduce tactical freedom • partly with huge changes in the design as a result • The greater design freedom, the greater potential for innovation and rising production volume • but also harder to evaluate and control • The more quality criteria included, the more focus on internal cost-efficiency • very close to standard gross-cost tendering • None had sufficient basis for service improvements in contract period • net-cost contract: high risk - low gain • reducing income risk or increasing income potential

  6. Indirect quality tendering in Telemark • Tendering out performance contracts • creating super incentives • Maximised freedom for operator in contractual period • within specific constraints: minimum service levels • Threatening competition (if the service fails) • in connection to a quality satisfaction index • Simple and objective tendering procedure • Price the sole criteria

  7. Examples of incentives and value of the contract- with initial service level and cost structure (euro)

  8. Outcome of the first tender • Not a change of operator, but a new consortium of local operators • “Metro-bus” development (8 to 3 lines) • “Double frequency for half the price” • Invited local municipalities to co-finance the development • Promising, but too optimistic?

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