1. Highways Maintenance Contract Commissioning Project
Market Engagement Events
2017

2. Ambition
Highways, Transportation and Waste‘s ambition is to ensure that people can travel safely, efficiently and pleasantly throughout the County. Furthermore it should maximise the lifespan and minimise the lifecycle costs of the highway and its assets.
Highways Maintenance Contract Commissioning Project
Market Engagement Event

3. Project Aims and Objectives
The scope of the project is to evaluate current contracts and propose a delivery model that meets the outcomes of the HTW business.
It will need to ensure continuity of these delivery services beyond the 31st August 2018, when its current large scale contract expires.
Understanding its deliverables, the business will propose a model that can seek efficiencies and ensure value for money for its customers.
Put in place new mechanisms for the ongoing service delivery post August 2018.
Highways Maintenance Contract Commissioning Project
Market Engagement Event

4. Commissioning Cycle
Review the HTMC and develop a delivery model that meets the business’ needs
Potential delivery models
Extend the current contract with the incumbent contractor and procure a new machine resurfacing contract
Procure a large scale contract consisting of all services
Develop our delivery model and split up our contracting arrangements with specialist providers
Highways Maintenance Contract Commissioning Project
Market Engagement Event

5. In scope Highway Term Maintenance Contract Resurfacing Contract
Winter Service Provision
Drainage Maintenance and Capital Projects
Structures Maintenance
Patching and Small Resurfacing Services
Surface Treatments
Emergency Response
Highway Schemes Delivery
Resurfacing Contract
Highways Maintenance Contract Commissioning Project
Market Engagement Event

6. Out of scope Street Lighting Services
Replacement of Works Ordering and Asset Management System
Technical and Environment Consultancy Services
Related services provided by District and Parish Councils – however there will be scope in the OJEU notice should this become a future requirement
Asset Management Approach
Landscaping Services
Highways Maintenance Contract Commissioning Project
Market Engagement Event

7. Project Progress ‘Analyse’ phase commenced from September 2016
Held workshops for all HTW staff to understand their experience of the contract
Local Authorities - face to face meetings and via teleconference to understand their contractual arrangements
Identified and evaluated 7 options across 5 criterion
OBC presented at the GET Portfolio board
Approval to close the ‘Analyse’ phase
Highways Maintenance Contract Commissioning Project
Market Engagement Event

8. Objectives of Market Engagement
The Authority wants to listen to the market to help inform it before it makes the right decision for the future strategy for these services.
This is a two way engagement event for both parties to understand the services under consideration.
The Authority is keen to improve its service to customers but does have a decreased budget.
Key points
Discuss the services under consideration to determine how these could be packaged for future contracts
Discuss the pro’s and con’s of the Authority’s options
Discuss the key risks in service delivery and understand how these can be best managed.
Highways Maintenance Contract Commissioning Project
Market Engagement Event

9. Achievement
Visited a number of local of Authorities to understand their delivery models
Direct Labour Organisation
Full outsourced Highway function
All in one contract vs splitting up arrangements geographically or by service type
Teckal model
Conduct market engagement with companies throughout the supply chain
Develop the potential delivery models
Agree the decision making process for sign off
Highways Maintenance Contract Commissioning Project
Market Engagement Event

10. Discussion Points Services Innovation Delivery Models
Break up the contract into districts and distribute across the supply chain
All services within one large contract
A core contract with specialist services delivered separately
Winter Service was a KEY RISK that would be factored into a decision
SME’s want to work directly with KCC
Innovation
How does the Authority and Contractor capture innovation throughout the contract period
Innovation to be aligned to performance delivery
Who is tasked with the risk for innovation – what are the reward mechanisms
Improvement in material choices across the highway
Reduce waste to landfill and recycle throughout the highway works
Highways Maintenance Contract Commissioning Project
Market Engagement Event

11. Discussion Points Operation of the contract Performance Levels
Commercial
Operation of the contract
IT System Integration
Plant, Labour and Materials
Design and Build services
Works Ordering
Programming and Permitting
Performance Levels
How many KPI’s are too many – needs to be a manageable number
Focus and consequence for lack of performance
Penalties - do not automatically penalise for failure – it could cost KCC more
Asset Management
Overall guarantees for ordered works – how are extended guarantees delivered
Work in collaboration to deliver asset management
Added value can be achieved through asset management to reach outcomes
How should asset management services be paid for – separately or through the rates
Highways Maintenance Contract Commissioning Project
Market Engagement Event

12. Discussion Points Winter Service Depot Utilisation
Risks
Winter Service
Depot Utilisation
Contract Aggregation
Emergency Response
Budget reducing year on year
Prices expected to increase
Encouraging SME’s to take more responsibility
WAMS – Asset Management and Orders
Dependency of other contracts
Ensure risk is placed with the appropriate party who can manage it
Highways Maintenance Contract Commissioning Project
Market Engagement Event

13. Discussion Points Supply Chain Size, Value and Length of Contract
30 Day payment terms – include back to back arrangements through supply chain
Consensus is to utilise NEC based Terms and Conditions
All in One contract
Size, Value and Length of Contract
Market for large TMC are awarded for a minimum period of seven years
To appropriately resource the county, a minimum core value budget of £20m would be required for market interest
Potential specialist arrangements would vary between 2 – 5 years dependent on nature of plant and resources required to deliver
Forms of Contract
HMEP toolkit is encouraged as it has been developed with Highway Authorities and the industry
Payment Mechanisms
Schedule of Rates as a starting point – move towards Target Costing and Lump Sum where appropriate
Highways Maintenance Contract Commissioning Project
Market Engagement Event

14. Discussion Points Method of Procurement Price/Quality Split
KCC should look to reduce the cost of tendering as this is incorporated into the costs
Competitive Dialogue very expensive – Restricted or Competition with Negotiation Procedures
Shortlist through pre qualification to 4 – 5 companies
Price/Quality Split
Ensure quality is fairly assessed and that 100% of the awarded score can be achieved
60:40 or 50:50 Price/Quality split
Specification
Historical data on work completed
Budget information
Information Required from Contractors
Ensure due diligence of the submissions
KCC need to consider the right partner for the right price
Highways Maintenance Contract Commissioning Project
Market Engagement Event

15. Option 1 Highways Maintenance Contract Commissioning Project
Market Engagement Event

16. Option 2 Highways Maintenance Contract Commissioning Project
Market Engagement Event

17. Option 3 Highways Maintenance Contract Commissioning Project
Market Engagement Event

18. Project Timescales Market engagement – March to June 2017
‘Analyse phase’ Closed
‘Plan phase’ 2017
Market engagement – March to June 2017
Detailed specification development – March to September 2017
Finalisation of the shortlisted options – July 2017
Evaluation of the shortlisted options – August 2017
Development and Approval of Business Case – 30 August 2017
Secure corporate approvals (SCB) – 19 September 2017
Procurement Commences (if approved option) - September 2017
Highways Maintenance Contract Commissioning Project
Market Engagement Event

19. Project Timescales ‘Do phase’ 2018 Tender Submission – January 2018
Tender Evaluation and Clarification – January to March 2018
Approval and award of the agreed option – March 2018
Contract Award – April 2018
Mobilisation – April to September 2018
New delivery arrangements/contracts start – 1 September 2018
Project Closure – December 2018
Highways Maintenance Contract Commissioning Project
Market Engagement Event