HIGHWAYS Agency officials are planning to strip price considerations from tenders for Early Contractor Involvement (ECI) projects.
Instead they will rely on quality factors alone when choosing contractors.
The Agency was this week putting the final touches to the new approach which will see contractors bidding for work entirely on their ability to deliver scheme objectives.
Under ECI schemes, design and build contractors are appointed ahead of planning inquiries.
Officials have decided not to use price to influence their choice of contractor on these schemes because budgets will be fixed in advance in future.
Instead the Agency wants to encourage contractors to devise ways of delivering projects below budget as a way of encouraging efficiency gains.
The Agency has adopted this approach because the Treasury has ordered the Department for Transport to fix budget ceilings for future highway schemes to ensure it exerts more control over costs.
In future, contractors for ECI will be chosen using the Agency's capability assessment toolkit (CAT) ranking system.
'What we are saying is, 'this is the money we have to spend, these are the objectives'. Now we're looking for the team that gives us most confidence that it can deliver, ' said Agency supply chain manager Gary Wright. 'We are getting away completely from the game of price.'
The ECI team will then be given strong incentives to find ways of reducing target costs.
'For example, a scheme with a budget of £120M may have a works budget of £100M. If the ECI contractor says it can do it for £90M it could collect a 30% share of the savings, paid over the course of the contract, ' said Wright.
'If it then beats £90M it could share a further 15% of those savings, ' he said. 'But if it can't meet its revised target it will pay 50% of the overruns.