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Highways Agency expects mixed ASC contracts performances

Highways Agency bosses are bracing themselves for a wide range of performances from the contractors which scoop its highly sought after Asset Support Contracts (ASCs).

“Variable” results predicted

Highways Agency chief executive Graham Dalton told NCE that he was expecting “variable” results as contractors begin to make the switch to ASCs from managing agent contractor (MAC) contracts.

ASCs are expected to deliver substantial savings over MAC contracts by allowing contractors more flexibility about how and when they do work, with outcome based maintenance standards.

“A little bit of the thinking behind ASCs is that since I joined the Agency three and a half years ago, contractors have been saying to me ‘let us get on with the work in our own way’. Well, this is a little bit of calling their bluff. Here is their chance and we are probably expecting variable results,” he said.

“Contractors have been saying to me, ‘let us get on with the work in our own way’. Well, this is a little bit of calling their bluff. Here is their chance”

Highways Agency chief executive Graham Dalton

“Some will shine and make money, but some will not get it,” he said.

Dalton added that contractors will have to put far more emphasis on selecting the right team to deliver the work than before.

“This is not just about having a good bid team,” he said.

“Once the contract is won, and the bid team has moved on, those that are left with it are going to have to deliver. And some will be better than others.”

Payment to ASCs will be made through a schedule of rates that features a year-on-year cost-reduction mechanism, designed to drive continual innovation.

Specifications have been rewritten to allow this, with contractors focused on meeting certain outcomes rather than following standard methods.

“Once the contract is won, and the bid team has moved on, those that are left with it are going to have to deliver. And some will be better than others.”

Stephen Dalton

“We have rewritten the specification. It’s not substantially reduced, we have just had to take out all the bits that tell them how to do it,” said Dalton.

“It’s a leap of faith,” he added.Incumbent MAC contractors are already retrofitting elements of the ASC contracts to their current deals.

Dalton admitted that they would have an advantage when tendering for new ASC deals as a result.

Contractors have submitted tenders for the first ASC which is for Area 2. This covers Somerset, Devon, Dorset, Gloucestershire and Wiltshire.

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