Developing the simulation model towards sustainability of implementing performance-based contract

Performance-based contracts (PBC), one kind of the delivery system has been conducted in Indonesia starting in 2011. The aim of the implementation of PBC in Indonesia is to solve the premature deterioration of national roads in Indonesia that still occur to date and to achieve the best level of service. Implementation of performance-based contracts is not as easy as imagine since many contractors still don’t understand to control the risk if they are given work with performance-based contracts. In this study used the system dynamic approach, the choice of this method because PBC is a long-term contract, where past events can affect current and future events, as well as future events, can be avoided by evaluating today’s events and events in the past. In this paper will show the interface generated after the base model Stock Flow Diagram (SFD) is verified. After the model has been validated, the model is ready as a simulation tool to get the best performance-based contracting mechanism and implementation in Indonesia. So, it can be used in developing countries