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Road agencies are increasingly incorporating performance-related specifications (PRS) in construction contracts to specify quality in terms of parameters related to desired long-term performance. PRS provides a means to account for the value lost or gained by the variances of the designed performance parameters from the specified target values. The use of PRS for pavement preservation treatments (e.g. chip seals) has been generally non-existent. The objective of this paper is to establish a step-by-step procedure for formulating chip seals PRS guidelines. The percent embedment (PE) of aggregates into emulsified asphalt was selected as the acceptance quality characteristic (AQC). Chip seal specimens with varying percent embedment levels were prepared using aggregate and emulsion types in Michigan. Aggregate loss and bleeding were selected as performance indicators. Laboratory tests were conducted to compute PE, aggregate loss and bleeding for the chip seal specimens. Relationships were developed between quality measures, service life, and pay factors. The expected pay curves were developed based on quality measures and were used to establish acceptable and unacceptable quality levels. The pay factors were evaluated to ensure fair payments for the quality of work produced. The work presented will provide the general guidelines for developing PRS for chip seal projects. [ABSTRACT FROM AUTHOR]