The Highways Agency has outlined a new form of contract for maintenance and improvements to motorways and trunk roads in England.
The asset support contract will replace the existing arrangements, known as managing agent contractor (MAC) contracts, which currently form the basis of maintenance agreements on most parts of the Agency’s network.
The Agency says these are expected to deliver substantial savings over the current arrangements, which will help to achieve the government’s commitment to reduce the budget deficit.
In the new contracts, maintenance standards will be “outcome based” and the Agency will be less prescriptive about how the outcomes are delivered. Innovation and efficiencies will be incentivised, including through the opportunity for contract extensions. The pricing of contracts will be simplified with a schedule of rates and a year on year cost reduction mechanism, and the supply chain will also be paid quicker through individual project bank accounts.
The new approach will be first introduced with the retendering of the Agency’s Area 2 contract, which covers strategic roads in much of the south west of England. It is due to be awarded in 2011.
The Agency said there some features of the new contract will be incorporated into existing maintenance contracts.
“This is not a case of introducing changes and improvements to the existing contract, rather it is a fundamentally new approach to how we manage the strategic road network,” said Highways Agency procurement director David Poole. “It gives [contractors] a platform from which to drive innovation and efficiencies and will lead to contracts which reward capable suppliers who deliver appropriate quality, responding to new standards and ways of working, at significantly reduced cost.”
Contractors were informed of the changes yesterday.