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Highways Agency shakes up maintenance work

The Highways Agency is taking some of its roads maintenance work back in-house, but it denies that asset support contracts (ASCs) will be phased out.

The Agency is to split the maintenance of its Area 7 - covering the East Midlands - into three separate contracts for design, construction and routine work, as well as doing more of the decision making itself.

Area 7 is currently held by the Aone+ consortium of Colas, Costain and CH2M Hill under an old-style managing agent contractor (MAC) arrangement. This is due to expire in summer 2016, but will not now be replaced by an ASC, like the other 11 areas .

ASCs - developed during the government’s austerity squeeze and designed to drive down the cost of roads upkeep - have hit problems, with shortlisted firms across five areas recently asked to re-tender after the Agency was unhappy with parts of some bids

M25 at night

New direction: The Highways Agency is taking more control of maintenance work

The contracts were designed to reduce maintenance costs by up to 25% by offering contractors more flexibility and control over how to achieve specific road condition outcomes.

In the East Midlands, the Agency is to take back control of decision-making from its contractors, and instead procure one firm for design, one for construction, and another for routine maintenance such as grass cutting and winter gritting.

“We need to break the work down into three elements so we get the right people focusing on each element,” said Highways Agency network delivery director David Brewer.

“We will go to market for the contracts, and we are still working on the detail of how we will do that.”

The Agency revealed that fresh invitations to tender would be issued to bidders for the Area 4 (South East) and Area 12 (Yorkshire) ASC deals by mid-March.

Shortlisted firms in Areas 1 (Devon and Cornwall), 13 (North East) and 14 (North West) will receive tender documents by the end of June, it added.

The client is reverting to this stage of procurement for those contracts after having “concerns with some elements” of the original bids it received, said a spokesman.

But Brewer insisted the five contracts would continue as ASCs, joining six that have already been awarded since 2012.

“The ASCs we have and are continuing with have been really successful,” he said. “They were launched in times of austerity and reduced costs by 29% without a deterioration of the condition of the network.”

He said changing targets had created a need for a new approach in some cases.

“We have committed to improving traffic flow and safety, reducing congestion and working more efficiently while increasing customer satisfaction,” said Brewer.

“We will need to be much more effective at long term asset management planning and using data,” he added.

“We need to be closer to the decision making as that’s what will drive the improvement.

“The old ASCs and those we are awarding transfer potential risk to contractors.

“The model we are using for Area 7 allows us to bring decision making in-house.”

After Areas 1, 4, 12, 13 and 14 are awarded as ASCs, and Area 7 is awarded under the new format, the next deals up for renewal will be Areas 2 and 10.

Brewer said the type of contract used on these would be decided on merit.

“We will be looking at Area 7 and also at the [ASCs],” he said. “We also have another form, for the M25, where a design, build, finance and operate contract is in place. That has been done differently to MACs, ASCs and Area 7,” he said.

“Even the ASCs are not all the same. They have been let in different lots, and each time the contract has evolved. We look at what is working and not working and learn.

“There is some benefit in having a blend of different models.”

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