Performance-based contracting for the management and maintenance of road networks is a new concept designed to increase the efficiency and effectiveness of road maintenance operations. It should ensure that the physical condition of the roads under contract is adequate for the need of road users, over the entire period of the contract which is normally several years. Performance Contracts are defining a product and it is up to the contractor how to achieve this. Therefore, work selection, design and delivery are all his responsibility. Hence, the choice and application of technology and the pursuit of innovative materials, processes and management are all up to the contractor. This allocates higher risk to the Contractor compared to traditional contract arrangements, but at the same time opens up opportunities to increase his margins where improved efficiencies and effectiveness of design, process, technology or management are able to reduce the cost of achieving the specified performance standards.Current best-practice techniques in outsourcing rely on output and performance-based contracts.