Dynamic Contracting in Infrastructures (Doctoral Consortium)

In the joint initiative ’Dynamic Contracting in Infrastructures’ the aim is to develop a contracting procedure that is able to cope with the additional complexities of recently popular performance based contracts. Commonly in maintenance of (public) infrastructures, such as a national highway network, an asset manager is responsible for high network quality and throughput, while limiting expenses to a minimum. The maintenance activities however are often performed by commercial, third-party contractors, mainly driven by profit. There is a misalignment between the objectives of both parties, complicated by the contingency inherent to the domain, that has to be resolved on a network level in order to achieve high quality joint maintenance plans. The focus of this PhD is on the design of a dynamic payment mechanism that, in combination with stochastic planning, can be applied to the development and execution of joint maintenance plans. Through monetary incentives we stimulate selfish contractors to consider global objectives, such as asset quality and network throughput, and coordinate their activities on a network scale.