Rijkswaterstaat is a governmental institution that is responsible for the management and development of the Dutch main roads, waterways and water systems. A DBFM contract is a contract in which the aspects of designing, financing, constructing and maintaining a construction project are integrated. The contract is long-term and based on delivering a service instead of an asset. This research is aimed at the period of time in the contract after the construction is completed which is called the exploitation phase. To make sure that the service is delivered according to the standards, the client has formulated functional output specifications. In order to check whether these functional output specifications are met, the performance of the contractor is monitored. This monitoring of the performance is processed into the payment mechanism. If by monitoring it turns out the functional output specifications are not met and thus the performance is insufficient, this has financial consequences for the contractor. After finishing the construction, the contractor receives an availability payment of Rijkswaterstaat every quarter of the year. The gross availability payment is the maximum amount that the contractor can receive. The contractor will receive this amount if no discount is imposed. There are two different discounts that can be imposed by Rijkswaterstaat: the Availability Discount and the Performance Discount. The Availability Discount has a direct link to the payment. There is no debate possible on the Availability Discount. The Performance Discount has an indirect link with the payment. The contractor can approach the Contract Manager of Rijkswaterstaat to discuss the Performance Discount. If the contractor cannot meet certain specifications, penalty points can be imposed by Rijkswaterstaat. The specifications in the contract indicate what amount of penalty points are to be imposed in the occurrence of shortcomings by the contractor. The Contract Manager has the authority to decide on imposing penalty points. It is known that not every shortcoming according to the contract ends in penalty points. It is unknown how the approach of a Contract Manager can influence the penalty points that are imposed. Different reports state that managers argue that this has to do with the culpability of the shortcoming. How do Contract Managers make this decision? What is their approach? What influences that approach? The political management calls for uniformity and standardisation, while the Contract Managers are afraid that this will come into conflict with the culpability and proportionality of the penalty points and that this will have a negative impact on long-term cooperation (Court of Audit, 2013; Rijkswaterstaat, 2017b; Tweede Kamer der Staten-Generaal, 2017).
The relationship between Rijkswaterstaat as client and the private party as contractor is related in the study to the relationship between principal and agent that forms the basis for both the Agency and the Stewardship theory. These theories are used to generalise and clarify the findings. This principal-agent relationship is characterised by the information-asymmetry between both parties. The exchange of information between the client and the contractor is incorporated into the research. The main question of the study is as follows:
How do the Agency and Stewardship theories clarify the influence of information exchange between clients and contractors on the approach of Rijkswaterstaat Contract Managers when imposing penalty points in the exploitation phase of the DBFM contract? The first phase of the research was completed through a literature study and a preliminary research. This preliminary research consisted of studying the internal Rijkswaterstaat document and informal conversations with Contract Managers. This phase ended after the design of a theoretical framework and is followed by the empirical research. This was done through a case study. Four projects were selected for the case study. The Contract Managers of these projects were interviewed. The theoretical framework serves as a tool to analyse and visualise the relative position of the projects. The collected knowledge has been analysed in order to discover interdependencies in the characteristics of the projects in terms of the perspective on the penalty points regime, sharing information and the approach of the Contract Manager. The last part combines all aspects of the research in which the validation, discussion, conclusion and reflection of the research are presented.
The Contract Manager is part of the Integral Project Management (IPM) team that is responsible for managing one or more infrastructure projects of Rijkswaterstaat. The Contract Manager must ensure that all parties to a contract fully understand their respective obligations and possible shortcomings. The requirements are laid down in the contract by managerial actors. In order to understand these requirements and to assess the outcomes, the Contract Manager obtains knowledge and information concerning the profession. The Contract Manager is located between these managerial actors and the profession. This position relates to the actor that ‘can both play the managerial game and understand the profession’ and is defined by De Bruijn (2006, pp. 90–91) as a boundary spanner. The process of imposing penalty points starts with the observation that a performance requirement is not met. This can be observed by an individual or by a computer system. In the case of a deviation that is worth penalty points, this is a shortcoming on the part of the contractor. The shortcoming is then registered in a system. Ultimately, a decision will be made on whether to impose penalty points. There are three different outcomes: penalty points are imposed, penalty points are placed on hold and the contractor formulates a control measure or no penalty points are imposed. If the control measure is not met, penalty points can still be imposed. The decision to impose penalty points relates to governance through monitoring and incentives described in the Agency theory. The decision to put a penalty point on hold and to have the contractor formulate a control measure relates to governance by means of empowering structures described in the Stewardship theory. The Contract Manager has the authority to make this decision. The Contract Managers make this decision based on the ‘Stramien Boetepunten’. The ‘Stramien Boetepunten’ is a guideline and not a legislation. This guideline is an attempt to describe the tacit approach of the Contract Managers and takes into account the nature of the requirement, the culpability of the shortcoming and the proactivity of the contractor. Culpability and the proactivity of the contractor can often be interpreted in different ways and is subjective. Although imposing penalty points is discussed in the IPM team, one Contract Manager can make different decisions than the other. The results of the research give a suggestion of a number of interdependencies. The research suggests that a Contract Manager who is closer to the profession obtains more nice to know-information, which reduces the demand for need to know-information. This Contract Manager has higher levels of trust and prefers to have a control measure formulated. Higher levels of trust and the preference for a control measure relates to the shareholder described in the Stewardship theory. Lower levels of trust, demand for monitoring, focus on the result and choosing to impose penalty points relates to the principal described in the Agency theory. However, the scope and history of the project influence the results of the research mentioned. A Contract Manager on a project with a smaller scope has fewer intermediate links that increase the distance between Contract Manager and the profession. In addition, Contract Managers can include past events in their decision. The problem definition showed that politicians value optimal follow-up of the contract. However, the research shows that the degree of discretion is regularly used by the Contract Managers to deviate from this. This is substantiated by the importance of a boundary spanner. By means of the ‘Stramien Boetepunten’ the Contract Managers attempt to guide their approach as a collective in advance of the decision on imposing penalty points. In order to reduce the risk of losing important information and to get a complete overview of the state of affairs, it is recommended to start collecting the information on imposing penalty points centrally.