The award of a second round of framework contracts for highways schemes in the Midlands confirms that the system is benefiting the region’s local authorities, reports
The Midlands Highway Alliance (MHA) launched its second period of framework contracting last month, having identified that local authorities in the Midlands had saved around £15M in design, construction and procurement costs during the first period of the framework.
The MHA was initially set up in 2007 by Leicestershire County Council and a handful of its neighbours to work together to improve performance, share best practice and make efficiency savings in highway projects. The alliance put together a number of different frameworks, including one for highways schemes up to £12M, which started in 2010. After a slow start, around 60 contracts with a total value of £250M were procured over the four years of this first medium schemes framework (MSF1) by 13 local highway authorities.
- Derby City Council
- Derbyshire County Council
- Doncaster Council
- Highways Agency
- Leicester City Council
- Leicestershire County Council
- Lincolnshire County Council
- Milton Keynes Council
- Northamptonshire County Council
- Nottingham City Council
- Nottinghamshire County Council
- Oxfordshire County Council
- Peterborough City Council
- Rotherham Metropolitan Borough Council
- Rutland County Council
- Sandwell Metropolitan Borough Council
- Staffordshire County Council
- Stoke-on-Trent City Council
- South Derbyshire District Council
- Telford and Wrekin Council
- Wolverhampton City Council
A report published to coincide with the launch of the second framework shows that MSF1 was used mostly by three authorities, Leicestershire, Staffordshire and Peterborough City Councils, although a further seven used it more than once. The majority of contracts procured through MSF1 were for work up to £2M in value, with just over a third accounted for by schemes valued at less than £100,000.
According to the report, the substantial savings achieved through the framework were at least partly a consequence of early contractor involvement (ECI). Of the nine MSF1 contracts studied in detail in the report, the six that produced the highest savings all used ECI.
The success of MSF1 has prompted the alliance to extend the scope of the framework for the second four year period to cover work up to a value of £25M instead of £12M. The new framework has been split into two lots.
One is for schemes worth up to £5M, with the contracts going to Balfour Beatty, Eurovia, Galliford Try, Aggregate Industries and Lafarge Tarmac/Carillion. The other is for projects valued between £5M and £25M, won by Balfour Beatty, Galliford Try and Lafarge Tarmac/Carillion.
“These schemes are now delivering more than just a highway project into the community”
John Hooper, MHA
MSF2 contracts will be awarded in a similar way to those on MSF1, according to MHA framework manager John Hooper. “Each contractor has priced up six model jobs. They are not held to a schedule of rates, but they have been scored on a range of different performance indicators and quality scores,” he explains.
“From information given by an authority, we will suggest which contractor is best suited to a particular project. Some authorities have used the framework in this call-off manner. Others have entered into a further mini tender process.
“It is the ECI process that is most important,” Hooper adds. “A further round of tendering takes up more time and, in my view, is over elaborating. It is better to sit down with one of the contractors and get started on design and agreement of a target price.”
In addition to the two medium schemes frameworks, the MHA also has a professional services framework contract with URS, plus working groups dedicated to joint procurement of commodities and standardising materials specifications.
The alliance itself has developed over the course of the first framework, and now has a membership of 20 local authorities plus the Highways Agency, its own management team and five working groups overseen by an Alliance Community Board. It is also focusing on developing skills within local communities - something that is becoming increasingly important both for the MHA members and their supply chains.
“Winning a place on the MHA framework presented a challenge, because it is about more than just winning work,” explains Kevin Graham, framework manager for Eurovia, which has just won a place on MSF2, having also worked on MSF1. “But four years later we have undergone a culture change of working with communities on education and skills.”
“Local authority departments have been decimated by staff cuts, so there is a question over how they are going to deliver the big programmes being talked about”
Kevin Graham, Eurovia
One mechanism for encouraging the development and employment of people in MHA communities is through employment skills plans (ESPs). These plans, which are different on each project, are drawn up usingConstruction Industry Training Board guidelines, and set out what measures will be taken to attract local people - especially school leavers and apprentices - to work on the schemes.
There is an understanding that schemes valued at less than £1M will not normally be able to establish an ESP, but according to the MHA’s interim performance report, ESPs were developed by 13 projects procured through MSF1.
As of May this year, 53 employees of MHA contractors have started NVQs, nine apprenticeships have commenced, and more than 150 school pupils have visited MSF1 sites.
“These schemes are now delivering more than just a highway project into the community,” says Hooper, citing the example of the Doncaster Southern Gateway scheme, which employed four people locally and gave work placements to four 16 to 19 year olds. “These are significant numbers for a small, local scheme,” he adds.
Doncaster’s Southern Gateway is actually one of the biggest projects of the MHA so far, consisting of two phases of work totalling £22M.
Graham says the overall approach of the MHA is welcomed, but there are still questions to address regarding the best way to plan the programmes of work from the alliance’s growing membership.
“It was a struggle at times during MSF1 to resource and deliver schemes that were dropped in at short notice, so we urge better planning,” he says. “We know local authority departments have been decimated by staff cuts, so there is a question over how they are going to deliver the big programmes being talked about with very limited resources.
“The most important theme now is people, particularly lower down the supply chain, because it is local firms that will carry out the majority of this work,” he adds.
“A lot of people have left the industry. We won’t get them back, and there is a real risk of delay or rising costs due to a lack of resources. The greatest skills shortages and potential for local economic growth is with SMEs.”
How it works
Midlands Highway Alliance (MHA) management staff are employed by Leicestershire County Council, but funded by alliance membership fees and savings made by the framework contracts.
Framework manager John Hooper is a relatively new member of the MHA team, as is the alliance’s skills academy manager Theodora Elston, who coordinates training initiatives and provides the secretariat for its skills academy working group.
Eight local authority members of the MHA were represented at the working group’s last meeting, she says, adding: “We’re also trying to work with the professional bodies including the ICE, the Highways Term Maintenance Association and the Chartered Institution of Highways and Transportation as much as possible.
“Employment and skill plans are already in place on some MHA projects, but we’ve now put a broader business plan together along the lines of collaborative working; we’re trying to work in an innovative and creative way towards highlighting best practice of MHA members and finding new ways of working on skills development,” she says.
Items in the skills business plan include developing an electronic learning management system to be shared by MHA members, and introducing a skills and training matrix, with the hope that all members will follow this to create greater uniformity and promote secondments between highway authorities.
“We’re aiming to become a centre of learning and development for MHA members,” Elston says. “We want to make training more specific to local authority highway departments and what MHA members need. And we’re developing a learning community, an alumni organisation for sharing experience and staying in touch.”