Necessary conditions for performance-based contracting in the European railway industry.

Performance-based contracting (PBC) has become popular in many industries, especially in the armed forces and commercial and military aviation. Different from other forms of contracting, a firm using a performance-based contract wants to have a performance, an output or even an outcome rather than an action from a supplier. In the European railway industry, this type of contracting is not widespread on the level of rolling stock (maintenance), although the contrary should be expected and – from a practitioner's point of view – desirable. In this research, necessary conditions for successful application of this contract type are being developed and tested.