West Sussex County Council
Highways Delivery Procurement– Outline Business
Case
Prepared by Joe Dowling and Anthony Lindsell
November 2016
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Revision Schedule
Rev Date Details Prepared by
Reviewed by
Endorsed by
1.0 20.10.16 Project Director Review
A.LINDSELL J.DOWLING
2.0 25.10.16 Core team Review
A.LINDSELL CORE TEAM
3.0 28.10.16 Project Director Review
A.LINDSELL J.DOWLING
4.0 01.11.16 Senior Management Team Review
A.LINDSELL SMT CORE TEAM
5.0 02.11.16 Project Director Review
A.LINDSELL J.DOWLING
6.0 05.11.16 Project Director Review
A.LINDSELL J.DOWLING
7.0 07.11.16 Project Director Review
A.LINDSELL J.DOWLING
8.0 15.11.16 Project Board Review
A.LINDSELL PROJECT BOARD
SMT
9.0 17.11.16 Project Manager Review
A.LINDSELL Y.KONG
10.0 28.11.16 Project Manager Final Review
A.LINDSELL Y.KONG PROJECT BOARD
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Contents 1. Executive Summary ......................................................................................................................... 4
2. Introduction and Background........................................................................................................ 10
2.1 Introduction ................................................................................................................................ 10
2.2 Procurement Timetable .............................................................................................................. 10
2.3 Procurement Governance ........................................................................................................... 11
2.4 Aim of the Outline Business Case ............................................................................................... 12
2.5 Assessment Methodology ........................................................................................................... 12
2.6 Current Delivery Model ............................................................................................................... 14
2.7 Current Scope of Services ........................................................................................................... 14
3. WSCC Strategic Objectives and Influences ................................................................................... 16
4. Key Drivers for Change .................................................................................................................. 18
4.1 Procurement, Contracting, Standardisation ............................................................................... 18
4.2 Collaboration and Shared Services ............................................................................................. 18
4.3 Asset Management ..................................................................................................................... 18
4.4 Customer Satisfaction ................................................................................................................. 18
4.5 Benchmarking and Performance Improvement ......................................................................... 18
4.6 VFM, Affordability, Finance......................................................................................................... 18
4.7 Governance and Contract Management .................................................................................... 19
4.8 Incentives .................................................................................................................................... 19
5. Delivery Model Options Selection................................................................................................. 20
5.1 Options models ........................................................................................................................... 20
5.2 HMEP Procurement Route Choices Toolkit................................................................................. 21
5.3 WSCC HMEP Toolkit Outcome October 2016 ............................................................................. 22
5.4 Market Consultation – Soft market outcomes............................................................................ 22
5.5 Suitability, Feasibility and Acceptability of delivery models ....................................................... 24
6. Recommended Delivery Models for Full Business Case ............................................................... 27
6.1 Single Provider ............................................................................................................................. 27
6.2 Multiple Providers ....................................................................................................................... 29
6.3 Teckal ........................................................................................................................................... 31
7. Next Steps ...................................................................................................................................... 33
8. Appendices ..................................................................................................................................... 34
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1. Executive Summary
1.1 Introduction
The provision of the current Highways Maintenance contract comes to an end on the 30th
June 2018. A new procurement is being undertaken to ensure services are in place from July
2018. The cost of this re-procurement has been considered and deemed necessary to achieve
the West Sussex County Council (WSCC) future objectives. The delivery model selection
process incorporated various activities and inputs and used the industry standard Highways
Maintenance Efficiency Programme Procurement Route Choices Toolkit as supporting
guidance of the suitability of the delivery model options for WSCC.
1.2 Procurement Timeline
1.3 Procurement Governance
A governance structure for this procurement was developed to ensure the right level of
transparency and input was in place throughout the procurement process across all levels.
Cabinet
Task and Finish group (Members)
Project Board
Project Team
Working groups
1.4 Aims of the Outline Business Case (OBC)
This document forms the qualitative assessment of the delivery model options for WSCC
Highways Services. The OBC has been developed with reference to each model’s potential to
support WSCC’s key objectives and drivers. The OBC filters the delivery model options from 8
models to 3 preferred models to be considered further in the Full Business Case. The OBC also
Phase 1 - Outline Business Case (OBC) – December 2016
Phase 2 - Full Business Case (FBC) – March 2017
Phase 3 - Delivering Procurement Strategy:
Issue Official Journal of the European Union document (OJEU) – April
2017
Contract Documents – June 2017
Pre-Qualification Questionnaire (PQQ)/Invitation to Tender (ITT)
combined – September 2017
Negotiation phase – November 2017
Final tender – January 2018
Contract award – March 2018
Contract start – July 2018
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provides a rationale and justification for the rejected delivery models. The OBC will support
the key decision report for re-procurement to be made by Cabinet.
1.5 Assessment Methodology
In development of this OBC, WSCC consulted with Members, Officers and the industry through
market testing and independent procurement experts Collaborative Working Infrastructure
(UK) Ltd (CWI) who have been engaged to support this procurement. Information through
various activities was collated and analysed to provide an assessment of each model’s
potential to help achieve the objectives and key drivers for change that have been identified.
1.5.1 HMEP Procurement Route Choices Toolkit
This toolkit is industry recognised and was designed specifically for Highway authorities to
support decision making on delivery models.
1.5.2 Facilitated Workshops
A series of workshops/discussion groups were held to discuss and debate the various
requirements of the future delivery model along with the advantages and disadvantages of
the existing delivery model and the current contract.
1.5.3 Market consultation
A soft market testing day was run to gauge the views of the industry on what is attractive to
contractors in this new procurement and the current state of the market.
1.5.4 Peer review
A Peer review was commissioned by WSCC. The Peer review developed an understanding of
the priority settings and context for WSCC and identified the strengths and areas for
consideration of:
Planning and Performance
Enablers
Delivery
1.5.5 Site visits
Site visits are planned as part of the Full Business Case to undertake comparison of the
preferred delivery model options against our authority models.
1.6 WSCC Strategic Objectives and Influences
WSCC’s strategic objectives outlined in the Future West Sussex Plan 2015-19 are:
Giving children the best start in life
Championing the local economy
Independent for longer in later life
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It is important that the chosen model should maximise and not impede the achievement of these
objectives. There are also a number of key influences for WSCC on the choice of procurement model
namely:
Value for money
Supporting Social Value, the West Sussex economy and local enterprise
Reduction in funding and realisation of savings
Sustainability
1.7 Key Drivers for Change
In consultation with WSCC Officers through the various activities undertaken to date the
following drivers for change have emerged:
1.7.1 Procurement, Contracting, Standardisation
Need for flexibility to adapt to changes.
WSCC could have more input into sub-contractor contracts and support local SMEs.
1.7.2 Collaboration and Shared Services
Opportunity to explore collaborative opportunities with neighbouring authorities
including Parish and District councils that can be exploited in the new contract.
1.7.3 Asset Management
Require a model to build on existing improvements in Asset Management.
Need an efficient system to capture and update Asset Data.
1.7.4 Customer Satisfaction
WSCC value communication with their customers.
WSCC need to enhance customer feedback – Love West Sussex app.
1.7.5 Benchmarking and Performance Improvement
WSCC need a delivery model that allows for a contract that is set up to further improve savings and efficiencies and improve the processes and mechanisms.
The chosen delivery model must allow for the revision of performance targets to the “vital few” indicators of performance.
1.7.6 VFM, Affordability, Finance
Require a suitable model which allows for a new contract that can include banded
rates for pricing.
WSCC need a delivery model, contract and sufficient client resources to enable them
to ensure all Tier 2 suppliers use Open Book Cost Management (OBCM).
Ensure the new delivery model allows for increased cost transparency and cost
certainty in the new contract.
1.7.6 Governance and Contract Management
In selection of the delivery model, WSCC need to acknowledge the constraints on
recruiting and retaining the suitable client resource capacity and capability required
to administer the elements of each model.
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1.7.7 Incentives
A Continuous Improvement mechanism should be incorporated into the delivery
model selection. The selected delivery model should suit a more effective
incentivisation mechanism that delivers further efficiency over the duration of the
contract.
1.8 HMEP Procurement Route Choices Toolkit and Outcome
From all the information gathered from the activities and inputs in the OBC methodology, the
HMEP Procurement Route Choices Toolkit was completed with the Senior Management team to
further support the identification of the 3 best suited delivery models for WSCC.
HMEP Procurement Route Choices Toolkit – WSCC Delivery Models – Evaluated Options
delivery model scoring (top three):
Single Provider - 144
Multiple Providers - 128
Teckal - 128
1.9 Market Consultation
A soft market testing event was held with interested suppliers who were invited to one to one
interviews. The key areas of discussion related to the objectives of this OBC were:
Current market conditions
Scope of the contract
Contract duration period
Experience of Highways Maintenance Efficiency Programme
Contract specifics
There was a consensus gained from suppliers that a single provider delivery model would attract
most of the major players in the market.
1.10 Suitability, Feasibility and Acceptability
A qualitative high level assessment was also undertaken with the WSCC management team to
assess the suitability, feasibility and acceptability of all delivery model options. The following
factors were considered:
WSCC strategic objectives for this procurement
Procurement timescale
Affordability
WSCC resources, experience and expertise
Political acceptability
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In summary, only the Single Provider or Multiple Providers models were acceptable across all
categories of consideration. Teckal has some drawbacks but was considered the third most
suitable model.
1.11 Recommended Delivery Models for Full Business Case
The following 3 options of Single provider (plus option 1b Piggy-back), Multiple Providers and
Teckal have been selected as most suitable for WSCC to be considered in the Full Business
Case:
Option 1 - Single Provider
This option suits the current WSCC procurement timeline. Also as the current delivery model
is a Single Provider this suits the current WSCC delivery structure and resource capability to
deliver the requirements of this model. This option provides a single strategic partner over a
long-term contract. This also maximises the opportunity to deliver an integrated service,
brand and consistent approach. One of the disadvantages of the Single Provider model is
that there is a risk of the relationship between provider and client team becoming too
comfortable and the most significant negative aspect of this option is that WSCC will incur
fee on fee costs from Tier 1 to Tier 2 contractors.
Option 1b – “Piggy-back” neighbouring authority’s procurement (considered further in FBC)
Option 2 – Multiple Providers
This model had some attractive elements such as it offers WSCC direct control and
collaboration. WSCC would also benefit significantly from a major reduction in fee on fee
costs across this option. This model would also provide WSCC the opportunity to positively
influence the local economy and local SMEs. WSCC through tendering directly to market for
multiple providers potentially would have more competitive options.
However, there are also significantly higher costs of systems, resources and management at
multiple interfaces through this delivery option. There are also further costs of procuring
Multiple Providers. There are obvious complexities and resource requirements in developing
and setting up the contract management facets of the Multiple Providers option with the
integration and alignment of systems and software a critical requirement that will cost time
and money and require specialist expertise. The Multiple Providers model also removes the
possibility of delivering an integrated service and a consistent brand and loses the
opportunity for a holistic approach to innovation although individual innovation is obviously
still a possibility through the individual providers.
Option 3 - Teckal (Wholly owned company)
The primary benefit of the Teckal option is that WSCC would be exempt from the OJEU
procurement process. Additionally, the Teckal option is structured to provide an investment
mechanism for the contractor partner.
All staff could TUPE over to the Teckal company quite simply. However, there is an issue
over the complexities that relate to pensions such as where do the pensions sit and who
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holds the liability, WSCC or the Teckal company? Further TUPE considerations such as what
happens at the end of the Teckal company, would also yield further potential complications.
Moreover, the significant legal and political approvals that will be required will be time
consuming and complex. There is also the risk to WSCC of having to manage the entire,
potential deficit in funding.
Models ruled out
Framework – Timescale, management costs, re-procurement costs
Joint Venture – Timescale, potential conflict of interest, liability
In-House/In-House Top Up – Investment costs, risk, potential resource gap
Private Financing – Not currently available
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2. Introduction and Objectives
2.1 Introduction
The provision of the current Highways Maintenance contract comes to an end on the 30th June 2018
having been extended for 2 years past the 5-year contract let to Balfour Beatty Living Places (BBLP)
which commenced in July 2011. A new procurement is being undertaken to ensure services are in
place from July 2018. This has provided West Sussex County Council (WSCC) with the opportunity
to undertake a review of the whole, current service delivery. The cost of this re-procurement has
been considered and deemed necessary to achieve the West Sussex County Council (WSCC) future
objectives.
The annual value of the current contract has typically been between £25-£50m per annum. The last
three years has been at the higher spend between £34 - £50m per annum. This has been mainly
due to the “Better Roads” programme which has seen significant capital funding to enable
improvements to the network in the last two years. However, this funding and the programme
came to an end in April 2016. Therefore, the levels of funding have dropped to the original contract
expectation of £25 million going forward for the next two years. However, it is expected that the
Highways budget will be supplemented by other initiatives in the future.
The delivery model selection process incorporated various activities and inputs and used the
industry standard Highways Maintenance Efficiency Programme Procurement Route Choices
Toolkit as supporting guidance of the suitability of the delivery model options for WSCC. The
Highways Maintenance Efficiency Programme (HMEP) is a sector-led transformation programme to
maximise returns from highways investment and deliver efficiencies in highway maintenance
services.
This Outline Business Case (OBC) will form part of a key decision report for the approval of re-
procurement in December 2016.
2.2 Procurement Timetable (planned completion dates)
Phase 1 - Outline Business Case (OBC) – December 2016
Phase 2 - Full Business Case (FBC) – March 2017
Phase 3 - Delivering Procurement Strategy:
Issue Official Journal of the European Union document (OJEU) –
April 2017
Contract Documents – June 2017
Pre-Qualification Questionnaire (PQQ)/Invitation to Tender (ITT)
combined – September 2017
Negotiation phase – November 2017
Final tender – January 2018
Contract award – March 2018
Contract start – July 2018
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2.3 Procurement Governance 2016-2018
A governance structure for this procurement was developed to ensure the right level of
transparency and input throughout the process across all levels.
*Figure 1
2.3.1 Project Board
The Project Board provide strategic guidance and direction for the re-procurement. They
oversee the progress of the project team and take corrective action/decisions where
necessary to ensure key milestones are achieved.
2.3.2 Project Team
The Project Team co-ordinate and manage the delivery of the project. It is also responsible
for ensuring the new contract delivers further efficiencies and maximises value for money.
2.3.3 Working Groups
These groups focus on a number of activity streams such as operational works, commercial
processes, IT etc. They review lessons learned and identify desirable improvements for the
current contract.
2.3.4 Task and Finish Group
This is a cross-party Members group established to consider the evidence, issues, and
options for the future contract, including the review of current arrangements. This group
will provide recommendations to the Cabinet Member for Highways and Transport.
*See Appendix A Governance groups - Terms of Reference
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2.3.5 Cabinet Member for Highways and Transport
The Cabinet Member for Highways and Transport as part of the key decision report on re-
procurement will consider the recommendations of this OBC.
2.4 Aim of the Outline Business Case (OBC)
This document forms the qualitative assessment of the delivery model options for WSCC Highways
Services. The OBC has been developed with reference to each model’s potential to support WSCC’s
key objectives and drivers. The OBC filters the delivery model options from 8 models to the 3
preferred models to be considered further in the Full Business Case (FBC).
In summary, this document:
Outlines the methodology applied in appropriate models.
Confirms the strategic objectives to be supported by the future Highways delivery.
Identifies the key drivers for change.
Sets out an assessment of the delivery model options.
Funnels the delivery models to the 3 most suitable options to be developed further in the
FBC.
The FBC will refine in further detail the 3 options selected in this document down to one single
preferred delivery model option for WSCC.
2.5 Assessment Methodology
In development of this OBC, WSCC consulted with Members, Officers and the industry through market testing and independent procurement experts Collaborative Working Infrastructure (UK) Ltd (CWI) who have been engaged to support this procurement. CWI has advised over 40 local authorities in highways and other aspects of procurement over the last thirteen years. Senior Officers from across the Council were engaged over a range of activities to provide supporting information and feedback based upon their knowledge of the existing delivery model and service as well as their experiences of other major projects and procurements. The information gathered from these sources was collated and analysed to provide an assessment of each model’s potential to achieve the objectives and key drivers for change that have been identified. The Outline Business Case has been developed from the following inputs:
Structured interviews to define the strategic objectives and drivers for change for
the new procurement.
Review of the current contract.
Best practice review of the current service delivery.
Lessons learned from the current contract.
Feasibility, Suitability and Acceptability assessment of delivery model options.
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Strength, Weaknesses, Opportunities and Threats Analysis of the current contract.
*See Appendix B Summary of OBC inputs
Based on the information collated above, a structured review of the delivery model options was
undertaken. This review assessed the potency of each of the models to achieve WSCC’s objectives
and drivers for change.
2.5.1 HMEP Procurement Route Choices Toolkit
This toolkit is industry recognised and was designed specifically for Highway authorities to
support decision making on delivery models.
Procuring via the wrong delivery model can be expensive and lead to poor partnerships
in service delivery. The Procurement Route Choices Toolkit was designed to overcome this
problem. It uses best practice to identify and inform the procurement and delivery strategy
and choices available, based on WSCC’s inputs and constraints. It has been used within this
assessment process to provide guidance in selecting the most suitable models.
2.5.2 Facilitated Workshops
A series of workshops/discussion groups were held with Officers, facilitated by CWI, to
discuss and debate the various requirements of this future delivery model along with the
advantages and disadvantages of the existing delivery model and current contract.
2.5.3 Market consultation
A soft market testing day was run on October 19th to gauge the views of the industry on
the most attractive elements to providers for the new procurement and the current state
of the market. The day comprised a series of facilitated feedback sessions with providers
and Officers during which representatives from providers were asked to debate key
questions regarding the procurement.
*See Appendix C List of attendees at market testing event
2.5.4 Peer review – summary of outcomes
A Peer review was commissioned by WSCC on 25th to 27th October 2016. The Peer review
developed an understanding of the priority settings and context for WSCC and identified
the strengths and areas for consideration of:
Planning and Performance
Enablers
Delivery
The key points for consideration related to this OBC are:
Current contractual relationship is effective.
There is a good relationship with sub-contractors.
High spend currently through local SMEs.
Lack of Asset Management Policy, Strategy and Plan.
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Systems and processes are not aligned.
Are staff resources matched to needs?
Contract management expertise needs to be improved.
Have opportunities around other models e.g. Teckal/Multiple Provider been
dismissed too quickly?
Short timescale for procurement could result in wrong decision.
The overall key messages were:
There is a resilient and committed staff group that delivers.
Change is inevitable it needs to be for a clear purpose and delivered quickly.
There needs to be an Asset Management plan to move forward and Members need
to set priorities from it.
The re-procurement is pivotal; it can’t be rushed.
Appetite for risk.
New management is a positive.
2.5.5 Site visits - Feedback and Lessons Learned from Other Authorities
Site visits are planned as part of the Full Business Case to undertake a comparison of the
preferred delivery model options against our authority models.
2.6 Current Delivery Model
WSCC in delivery of Highways Maintenance currently have multiple providers across the wider
service delivery e.g. design, traffic signals, streetlighting. However, for comparison with the generic
models in the HMEP Toolkit, the current model is classified as a Single Provider as the majority of
the maintenance services are provided by one provider.
2.7 Scope of Services for this review
The current Highways service is delivered via a mixture of a traditional Term Maintenance contract
and several frameworks to provide Design and Capital works. The scope of services considered in
this OBC are:
Reactive Response
Winter Service
Gully Cleansing
Chamber Cleansing
Routine Maintenance Structures
Tree Work
Hedge Trimming
Weed Spraying
Grass cutting Schemes/Programmes
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Carriageway Resurfacing
Carriageway Reconstruction
Carriageway Thin Surfacing
Carriageway Patching
Carriageway Surface Dressing
Footway Reconstruction
Footway Thin Coat
Drainage
Signs
Road Marking
Structures
Highways Improvement Schemes
Safety Fencing
Cycle Ways
Accident Prevention Schemes
Optional additional works may include but not be limited to:
Capital Works
Asset Management
Traffic Signals Maintenance
Public Rights of Way
One Stop Shop – Call Centre
Highways Inspections
Condition Surveys
Highways and Transport Professional Services
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3. WSCC Strategic Objectives and Influences
WSCC’s strategic objectives outlined in the Future West Sussex Plan 2015-19 are:
Giving children the best start in life
Championing the local economy
Independent for longer in later life
It is important that the chosen model should maximise and not impede the achievement of these
objectives. There are also a number of key influences for WSCC on the choice of procurement model
namely:
3.1.1 Value for money
WSCC need to deliver value for money.
3.1.2 Supporting Social Value, the West Sussex economy and local enterprise
WSCC are duty bound under the Social Value Act (in the commission of public services) to
think about how they can also secure wider social, economic and environmental benefits.
The procurement choice needs to be aligned to the objectives of championing of the local
economy, improving infrastructure that businesses and local communities need and to
support economic growth.
3.1.3 Reduction in funding and realisation of savings
There is a requirement to identify significant savings, of approximately £2m per annum, in
the first two years of the new contract against revenue targets. Consequently, it is critical
to assess the effectiveness of the possible procurement models in terms of their ability to
deliver cash releasing savings against current expenditure. This will be tested in the FBC
comparisons.
3.1.4 Sustainability
WSCC defines sustainability as “ensuring that the actions and decisions taken today
guarantee a better quality of life for everyone now and for generations to come”. It is based
on the principle that the quality of peoples’ lives is affected by a combination of economic,
social and environmental factors.
The key priorities for Highways delivery are to:
Embed sustainability within the business and deliver added social value.
Lead the way in valuing the place of West Sussex.
Realise efficiency savings in the short, medium and longer term.
Work with and influence others to maximise the benefits for West Sussex.
Drive the objective in the West Sussex Transport Plan of improving the quality of life
for people through:
Promoting economic growth
Tackling climate change
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Providing access to services
Employment & housing
Improving safety, security & health
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4. Key Drivers for Change
In consultation with WSCC Officers the following drivers for change have emerged:
4.1 Procurement, Contracting, Standardisation
Requirement for flexibility to adapt to changes throughout the contract and to test
performance.
Need for WSCC to have input into sub-contractor contracts and support local SMEs in the
supply chain. Consideration needs to be given to the pricing options used for sub-
contractors compared to the primary contractor’s pricing option.
4.2 Collaboration and Shared Services
There is a need to explore collaborative opportunities with neighbouring authorities
including Parish and District councils that can be exploited in the new contract. These
opportunities would deliver joint savings and efficiencies.
4.3 Asset Management
Need to support the improvements in Asset Management that are currently being
undertaken and a strong consideration in the selection of the future delivery model and
contract.
WSCC need an efficient system to capture and update Asset data to support an Asset
Management approach in the future.
4.4 Customer Satisfaction
WSCC value communication with their customers.
WSCC need to enhance customer feedback – Love West Sussex app.
4.5 Benchmarking and Performance Improvement
WSCC need a delivery model that allows for a contract that is set up to further improve
savings and efficiencies and improve the processes and mechanisms that are in place to
monitor and manage performance effectively against targets throughout the duration of
the contract.
The chosen delivery model must allow for the revision of performance targets to the “vital
few” indicators of performance. Currently they are too numerous and are not fully driving
performance or savings targets.
4.6 VFM, Affordability, Finance
Requires a suitable model which allows in the new contract to use banded rates for
pricing.
WSCC need a delivery model, contract and sufficient client resources to enable them to
drive forward the use of Open Book Cost Management with Tier 2 suppliers.
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Ensure the new delivery model allows for improved cost transparency and cost certainty
in the new contract.
4.7 Governance and Contract Management
In selection of the delivery model, WSCC need to acknowledge the constraints on
recruiting and retaining the suitable client resource capacity and capability required to
administer the elements of each model.
4.8 Incentives
The selected delivery model should facilitate Continuous Improvement and suit a more effective incentivisation mechanism that delivers further efficiency over the duration of the contract.
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5. Delivery Model Options Selection
5.1 Delivery models
*Figure 2
Private Funding - A Private Finance Initiative (PFI) which is long in duration, typically 25
years, and passes asset and service responsibility to the service provider. Note, it is
acknowledged that although the PFI mechanism is not currently available for use it may be
in the future as PF2.
Single Provider - most services transferred to single private sector partner. Client retains
some elements of service such as Asset management and performance management.
Framework - assumes more than one provider with similar skill set to allow mini
competitions to be held for work packages.
Joint Venture - exhibits attributes of an incorporated joint venture (i.e. it is a separate legal
entity). Very small client function retained in the local authority for contract management
purposes.
Multiple Providers - authority procures individual services from different providers such as
surface dressing, gully emptying, street lighting, etc. Client retains some elements of service
such as Asset management and performance management etc.
In-House + top up - simple top-up arrangement to fill gaps/weaknesses in the client team.
The amount of highway maintenance function remaining with the client depends on how
much top up is involved, be it single or multiple providers.
Teckal - a company wholly owned by the Council, which subject to certain conditions is
exempt from European Union procurement regulations.
In-House - assumes very limited and ad-hoc input from the private sector. Client provides
majority of services including “blue collar”.
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5.2 HMEP Procurement Route Choice Toolkit
The HMEP Procurement Route Choices Toolkit was completed with the Senior Management team to
further support the identification of the 3 most suitable delivery models.
This toolkit acts as a guide to map out the various considerations and alternatives when procuring
Highways Maintenance services. Through a facilitated workshop and a 2nd review to sense check the
original outcomes, WSCC Officers were taken on a process to assess influences, explore options and then
evaluate options before gaining political acceptability and determining the market appetite prior to
procuring a new contract.
*Figure 3
* See Appendix D HMEP Route Procurement Process diagram (enlarged)
5.2.1 Influences Assessment
The “influences” are those issues that currently affect highway maintenance services such as
low levels of customer satisfaction or constrained budgets. This section describes the core
influences to give background on the issues that need to be taken into account when identifying
the need for change from the current service delivery model.
5.2.2 Need for Change
For each of the 7 core influences, the group has reviewed how their experience of the current
service delivery aligns with current thinking and the WSCC future objectives and drivers for
change.
5.2.3 Explore Options *see Appendix E HMEP Toolkit Outcome
Having identified the need for change in relation to the current service delivery model the group
then explored the options that are available and most likely to suit WSCC requirements.
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5.2.4 Evaluate Options
This section enabled an evaluation of the options selected through the Toolkit against a number
of criteria that will deliver the WSCC needs for future service delivery. These were based on the
strategic objectives and the identified drivers for change.
5.2.5 Political Acceptability and Market Appetite
Political acceptability and market appetite have been gauged through the Task and Finish group
meetings and market testing activities. During the Full Business Case phase these areas will be
looked at in further detail.
5.3 HMEP Procurement Route Choices Toolkit outcomes
HMEP Procurement Route Choices Toolkit – WSCC Delivery Models – Evaluated Options October 2016.
*Figure 4
020406080
100120140160
Single Provider 144
Teckal 128
Mutliple Providers 128
In house Top-up 120
In house 112
Framework - ruled out
Joint venture - ruled out
Private Funding - ruled out
HMEP Procurement Route Choices Toolkit - WSCC October 2016 Evaluated Options
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5.4 Market Consultation
A Prior Information Notice (PIN) was issued to suppliers for a soft market testing event held on the 19th
October. Interested suppliers were invited to one to one interviews. The event was well attended with
over 10 major players in the sector.
*See Appendix C Contractor attendees list
There was a consensus gained from suppliers that a single provider delivery model would attract most
of the major players in the market. A summary of the conclusions drawn from this event were:
5.4.1 Current Market Conditions
Contractors felt that “the culture, collaboration and the proposed contract for the new
procurement was attractive to the market”.
5.4.2 Scope of the contract
There was consensus that the scope should be left open to allow for future flexibility. Many
contractors were aware of the need for flexibility to make changes within the contract.
In order to drive efficiencies, the scope could be broadened.
5.4.3 Contract duration period
7yrs + 3yr extension was considered the right duration. Less than 5 years was considered
unattractive and would deliver a poor return on investment on fleet and equipment.
A 6 month transition plan that incorporates a minimum 3 month mobilisation period is the
preferred option.
“The preferred approach is competitive negotiation if it’s not too lengthy”.
Shorter timescale in tender process is more attractive as it reduces costs however timeline
depends on scope
5.4.4 Experience of Highways Efficiency Maintenance Programme
Most contractors have had a positive view on the Highway Maintenance Efficiency
Programme based contracts.
5.4.5 Contract specific needs
“Incentives which work”.
“Flexibility to evolve contract”.
“Joining of services / IT etc. can provide efficiencies”.
All endorsed “a collaborative approach to deliver efficiencies”.
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5.5 Suitability, Feasibility and Acceptability of delivery models
A qualitative high level assessment was also undertaken with the WSCC management team to assess
the suitability, feasibility and acceptability of all delivery model options. The following factors areas
were considered:
Strategic objectives.
Available timescale for procurement.
Affordability.
WSCC resources, experience and capability.
Political acceptability.
The below table summarises the consensus viewpoint:
*Figure 5 – See Appendix F for enlarged chart
The review of suitability, feasibility and acceptability found the following models most suited to WSCC’s
needs:
Single Provider
Multiple Providers
Teckal (this option has some identified potential barriers in time and people as detailed
above but was deemed the 3rd most acceptable option)
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In this assessment, the following models were ruled out:
Framework
The 4-year maximum framework length is not acceptable for WSCC as it limits stability,
budget certainty and reduces the likelihood of savings being delivered. Best practice
supports the development of long-term contracts that maximise the opportunity to develop
a collaborative, integrated delivery and therefore the limited timescale of frameworks are
not in line with these principles.
Considerable costs and resource time will be incurred in the management and co-ordination
of the framework. The costs of re-procurement are another negative aspect as re-
procurement will need to start after just 2 years of the contract start. Frameworks also don’t
allow for significant investment in technology and innovation due to the limited time frame.
Achieving collaborative opportunities are also likely to be difficult across multiple providers
on the framework.
In summary, the view is that this model will require additional, scarce Client resources with
the limited likelihood of providing the savings and efficiencies needed.
Joint-Venture (JV)
There are obviously more complexities involved in developing and implementing this
delivery model compared to some other options. The time required to procure and setup a
JV is too long for the WSCC procurement timetable.
The Public/ Private structure of a JV introduces conflicts of interests for its public Officers.
There is also a mismatch of strategic fit in that while a JV company is set up primarily as a
profit making enterprise, WSCC’s prime objectives are to provide customer satisfaction and
efficient service delivery. WSCC as a shareholder is looking for profit but WSCC delivery is
looking for performance.
Also, there is the view that there is not the appetite for WSCC to carry the potential liability
for financial losses of a Joint Venture company.
Finally, for all these reasons this option has been ruled out.
In-House and In-House Top up
The In-House option requires significant investment in plant, equipment and “blue collar”
resources, to be able to effectively implement and deliver this option.
This model transfers the employment risk for the “blue collar” team to WSCC. In the current
economic climate with reducing budgets this is a significant liability. This investment and
transfer of risk is contrary to WSCC’s budget saving expectations. In addition, WSCC would
have to manage all the delivery risk and would lose the commercial expertise and innovation
available from the private sector. For these primary reasons this option has been ruled out.
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A resource shortage would be a likely outcome of selecting this delivery model as potentially
only “blue collar” employees are likely to TUPE to the new In-House Direct Labour
Organisation (DLO). This would leave a major gap in resources and expertise in key skilled
roles and management positions.
The In-House Top up option has also been ruled out for the same reasons as above.
Private financing
Private financing is not an option currently available.
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6. Recommended Delivery Models for Full Business Case
This section summarises the output from various reviews undertaken during this Outline Business Case stage and details the reasoning for the selection of the three options for consideration in the Full Business Case. 6.1 Option 1 - Single Provider
Although the current contract is the same generic delivery model this is not a “do nothing” option
moving forward.
This option satisfies the identified procurement objectives for WSCC’s next procurement. As the
current contract is a Single Provider for the existing scope of works, therefore the current WSCC
delivery structure and resource capability is suitable and sufficient to deliver the requirements of
this model.
The Single Provider option over a 7+ year period + extensions will attract sufficient interest from
the market to ensure there are bids from major providers. This option allows the long-term
development of a strategic, collaborative relationship with the contractor to offer a consistent
brand identity that is known and understood by the public. The emphasis on efficiency will allow
WSCC to focus on costs and maximising social value impact at a local level, whilst taking full
advantage of emerging industry approaches and collaborative working.
The most significant, negative aspect of the Single Provider option is that WSCC will continue to
incur significant fee on fee costs from the provider. The Single Provider option also limits
competition compared to some other delivery models. There is also a risk that the relationship
between provider and client team can become too comfortable and accordingly the contract is
not managed effectively and planned value for money is not achieved.
*Figure 6
Single Private Sector
Provider
WSCC Commissioning
& Delivery Client
Tier 2 Suppliers
Tier 2 Suppliers
Tier 2 Suppliers
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Advantages for WSCC
WSCC would have a single strategic partner over a long-term contract to deliver the contract collaboratively.
The existing WSCC delivery structure, resources and capabilities are mainly already in place to manage this option.
WSCC will benefit from private sector efficiencies.
Maximises the ability to deliver an integrated service, brand and consistent approach to service delivery for WSCC.
It will be easier with a Single Provider to build confidence and understanding quickly and implement an effective performance regime and establish effective payment mechanisms.
This model can be procured in the available timescale.
This option will not increase pressure on WSCC Client resources.
Makes delivery of social value easier compared to other models.
Disadvantages for WSCC
Fee on fee costs from provider
Relationship can become “comfortable” without appropriate performance management.
Possibility of being stuck with the wrong provider for the duration of the contract
No on-going competition between providers. Option 1b – “Piggy-back” This option, which will be further considered in the Full Business Case, is for WSCC to “piggy back” on a neighbouring authority’s procurement. Specific consideration will be given to the alignment with WSCC’s objectives after further investigation of neighbouring procurement models and contractual arrangements along with any TUPE and union specific elements.
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6.2 Option 2 – Multiple Providers
This model has some attractive elements such as it offers WSCC direct control and collaboration
with what essentially becomes multiple “Tier 2” providers which in other delivery options would be
sub-contractors to the Tier 1 contractor. WSCC would also benefit significantly from a major
reduction in fee on fee costs across this option with only minimal costs incurred compared to the
Single Provider option. This model would also provide WSCC the opportunity to positively influence
the local economy and local SMEs. WSCC through tendering directly to market for multiple
providers prospectively would have more competitive options.
However, there are also significantly higher costs of systems, resources and management at
multiple interfaces through this delivery option. There are further costs of procuring multiple
providers as opposed to other delivery options. There are obvious complexities and resource
requirements in developing and setting up the contract management facets of the Multiple
Providers option with the integration and alignment of systems and software a critical requirement
that will cost time and money and require specialist expertise. Ultimately the rationale for or against
the Multiple Providers model is made or broken over a detailed understanding of client overhead
and complexities vs. potential savings and ease of implementation. The Multiple Providers model
also makes it more difficult to deliver an integrated service and a consistent brand and loses the
opportunity for a holistic approach to innovation although individual innovation is obviously still a
possibility through the individual providers.
*Figure 8
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Advantages for WSCC
Benefits from private sector efficiencies.
Creates more client control for WSCC.
More opportunities for local SMEs.
Access to specialist contractors.
Reduced fee on fee costs. Disadvantages
Increased complexities in administration of multiple providers leading to increased costs and time.
More client contract management resources required, especially compared to single provider option.
Difficulty to develop a consistent brand.
Lack of consistency in systems, processing, reporting functions.
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6.3 Option 3 - Teckal (Wholly owned company)
The primary benefit of the Teckal option is that WSCC would be exempt from the OJEU procurement
process. Additionally, the Teckal option is structured to provide an investment mechanism for the
contractor partner.
All staff could TUPE over to the Teckal company quite simply. However, there is an issue over the
complexities that relate to pensions such as where do the pensions sit and who holds the liability,
WSCC or the Teckal company? Further TUPE considerations such as what happens at the end of the
Teckal company, would also yield further potential complications. Moreover, the significant legal
and political approvals that will be required will be time consuming and complex. There is also a
potential risk to WSCC of having to manage the entire deficit in funding.
*Figure 7
Advantages for WSCC
Exempt from obligation of OJEU procurement route.
Positively influences the local economy and provides more work to WSCC local contractors as suppliers to the Teckal company.
The Teckal company could be made available to other public and private sector clients and sell to neighbouring authorities, hence expanding workload and potential profitability for WSCC.
The profits that are returned to WSCC in the form of dividend or rebate would allow the council to reinvest in other services.
WSCC would be able to add further services at a future point in time, provided the company is structured to take advantage of the Teckal exemption.
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Disadvantages for WSCC
WSCC are exposed to any losses that the Teckal company may make.
WSCC does not have the level of capability or expertise to implement or manage a Teckal arrangement. The level of expert support required in areas such as legal and HR matters is higher than other delivery models.
The time required for establishment of this delivery option along with legal and political planning and authority to develop and formalise a Teckal arrangements will not fit into the existing WSCC procurement timeline. Any extension to the existing timeline would inhibit the delivery of the expected savings targets.
Complexities of pensions, TUPE, etc. to manage.
The Teckal company is subject to corporation tax.
Need to in-source and set up a Direct Labour Organisation (DLO).
Less able to deal with peaks and troughs in demand. It is recommended that these four options are now explored in more detail during the Full Business Case.
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7. Next Steps
Cabinet decision for re-procurement of new contract (includes supporting
OBC) – 6th December 2016
Full Business Case development – December 2016 to March 2017
Full Business Case completion – March 2017
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8. Appendices
Appendix A Governance groups terms of reference
Executive Task and Finish Group – Term of Reference
Background
The Highways Maintenance contract with Balfour Beatty Living Places (BBLP) commenced in July
2011. It is currently in its 5th year, ending on 1st July 2016 with an option to extend for a further 2
years.
A decision to extend was taken in April 2014 under delegated authority by the Strategic Director for
Environment. Formal legal documents were signed on the 18th January 2016. The contract expires
on the 30th June 2018, with no further extension option available under current arrangements with
BBLP without some element of risk.
The Cabinet Member for Highways and Transport wishes to appoint a XXXX Task and Finish Group
(TFG) to XXXX…
Aim
The Cabinet Member intends to take a key decision in early 2017 (January/February) to commence
the procurement process for a highways contract which will go live on the 1stJuly 2018. The new
contract will meet the Council’s objectives for the future, align to the pressures on the service and
will consider market options and contract management. The TFG will be supported by the project
manager (PM) for the procurement of the new contract and external consultants where appropriate.
The TFG will provide timely advice/recommendations to the Cabinet Member prior to the start of
the procurement process for the new contract (scope and timing will be mutually agreed at the
initial pre-meeting between the group and PM/senior manager/s). This will ensure that the new
contract will be ‘fit’ for the future, in that it:
Aligns with Future West Sussex priorities taking into account the needs of
communities
Addresses the organisational and service challenges
Is delivered quickly and efficiently once approved; and
Can be delivered sustainably
Purpose
The TFG will:
Consider the evidence, issues, and options for a future contract, including the review of
current arrangements/service and identifying needs with users/stakeholders to inform the
recommendations on the way forward for the new contract.
Provide timely recommendations to the Cabinet Member to inform the drafting of the
Outline and Full Business Case for the procurement of the new highways contract.
In carrying out its deliberations, work alongside other Officer working groups to review the
lessons learnt from the current BBLP contract.
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In considering the appropriate model for service delivery, TFG will be guided by Officers,
where appropriate, with the necessary organisational competencies required to operate the
new service delivery model.
Timescale
The TFG will meet a minimum twice between early July and September. It will present its findings
and recommendations to the Cabinet Member by the end of October 2016.
Membership
The TFG will consist of up to seven Members of the County Council, be cross-party if possible, with
the final Membership decided by the Cabinet Member for Highways and Transport.
Notes/Terminology
Outlined Business Case (OBC) – This outlines the indicative rationale behind the project. It will set
out what is it that project is trying to deliver, why and what options will be consider as part of the
deliberations. An indicative timetable for delivery will be considered along with possible benefits
being realised resulting from successful delivery of the project.
Full Business Case (FBC) – This will set out the finalised option being taken forward for delivery. The
FBC will set out the benefits resulting from delivery, resources required to deliver and a project
delivery programme to monitor progress and the governance required.
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Strategic Project Board - Terms of Reference
Main Purpose of Group:
The Board will provide strategic guidance and direction for the re-procurement of the HTMC. Where
necessary, provide the leadership to ensure the County Council is able to secure a committed service
provider for the delivery of the highways service that meets the aspiration and requirement of the
County Council starting from July 2018. The Board will receive progress reports from the Project
Team and review progress against milestones and direct any mitigation where necessary.
Chairman: Executive Director of Resident’s Services
Group Secretary: Project Manager for the procurement of the new HTMC
Members of the group:
Cabinet Member for Highways and Transport, Executive Director of Resident Services (Project
Sponsor), Director of Highways & Transportation (Project Owner), Director of Finance (S 151 Officer).
Timescale: Date of formation (July 2016)
Timescale: Date of review/completion (June 2018)
Meeting Frequency: Quarterly
Reporting to: WSCC Cabinet
Aims and Objectives:
Provide strategic leadership for the re-procurement of the HTMC 2018
Ensures the Outline Business Case (OBC) and the Full Business Case (FBC) are approved by
Cabinet of County council
Ensures the Outline Business Case (OBC) and the Full Business Case (FBC) are approved
Scrutiny Committee of the County Council.
The award of a new contract in March 2018 for the delivery of the highways maintenance
service.
Oversee the progress of the project team and take corrective action/decisions where
necessary to ensure key milestones are achieved. The key milestones are as follow:
o Outline Business Case – November 2016 (Cabinet Member decision)
o Full Business Case – February 2017 (Cabinet Member decision)
o Official Journal of European Union Notice (start of procurement process) – April2017
o Preferred Bidder/Award Contract - March 2018
o Contract Go Live - 1st July 2018
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o A contract with Service Provider that is future proof for the duration of its term (i.e.
changing service standards).
Expected Outputs:
A committed service provider for the highways service delivering efficient and effective
services to the residents of West Sussex.
A contract that aligns with Future West Sussex priorities taking into account the needs of
communities.
A contract that drive further innovations and efficiency throughout delivery chain and
delivers Value for Money for West Sussex
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Project Team – Terms of Reference
Main Purpose of Group:
To receive progress reports from working groups and the Project Manager/deputy PM and provide
guidance and direction to the re-procurement of the HTMC. Where necessary, provide the
leadership required to ensure the County Council is able to secure a committed service provider for
the delivery of the highways service that meets the aspiration and requirement of the County
Council starting from July 2018.
Chairman: Director of Highways and Transportation
Group Secretary: Project Manager for the procurement of the new HTMC/Project Support Officer
Members of the group:
Director of Highways & Transportation (Project Owner), Project Manager (Procurement of new
HTMC), Contract lead, Commercial lead, Legal lead, Procurement lead, Finance lead, Audit lead,
Deputy Project Manager, CWI’s Project Lead.
Timescale: Date of formation (July 2016)
Timescale: Date of review/completion (June 2018)
Meeting Frequency: Monthly
Reporting to: Project Board - Quarterly
Aims and Objectives:
Provide leadership for the re-procurement of the HTMC 2018
Responsible for the co-ordination and delivery of the re-procurement project.
The group will ensure the Outline Business Case (OBC) and the Full Business Case (FBC) are
prepared and submitted for WSCC corporate governance approval in a timely manner.
Key project milestones are achieved and delivered in accordance project programme.
Gateway Reviews are carried out to build confidence in the delivery timetable
Incorporate feedback/outputs from other key stakeholders i.e. Senior Management Team of
Highways and Transportation, Members Task and Finish Group and Contract Working
Groups.
Review/Monitor the budget allocated for the re-procurement of the new contract.
Ensure that the new Contract delivers further efficiencies and drive innovations and
maximise Value for Money (VfM) for West Sussex.
Expected Outputs:
Award of new Highways Termed Maintenance Contract starting 1st July 2018 following a
minimum 3 months’ mobilisation/de-mobilising process.
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Appendix B Summary of OBC inputs
WSCC TMC Procurement – OBC input summary
Inputs to date:
Written contract review
Contract review workshop
Best practice review of current service delivery
Structured interviews
Lessons learned from current contract
Feasibility and capability assessment
HMEP Procurement Route Choices Toolkit workshop
Strengths, Weaknesses, Opportunities and Threats Analysis
Other workshops
7-10 Year contract
Flexibility
More flexibility is needed in the contract to adapt to changes throughout the timeline but also to
test performance improvements or set targets year on year (5% savings Y1, 10% Y2, 20% Y3 onwards
etc.)
Savings/KPIs
Initial savings were delivered but ultimately limited savings have been delivered since then. The new
contract must be set up differently to deliver savings and efficiencies and ensure mechanisms are in
place to monitor performance and against targets.
Savings targets and KPIs/SPIs need to be revised – currently too heavy, too many, too clunky (130+)
and are not driving performance or savings. Savings/Efficiency driven KPIs need to be determined
and implemented and drive performance.
Incentives Centralised system of pain and gain is not working, need to concentrate on work. Pain and Gain share does not happen until the end of the year which is too late WSCC could incorporate system of scaled efficiencies (efficiency pain and gain). If there were measurable efficiencies for suppliers, then WSCC could offer reduction in rates. Contract Mgt
Currently the level of contract management is not sufficient to administer this contract so either
resource and capability needs to be considered in the terms and processes of the new contract or
the right resources need to be aligned to the new contract.
A lot of what is in the contract currently WSCC do not follow through on such as audits, quality
checks, cost controls….and the contractor knows this.
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Delivery Structure
The current structure is not ideally suited to collaboration which only some co-location and small
pockets of collaborative working. Especially where efficiencies can be achieved through
collaboration the new contract should consider a better mechanism for collaborative activities and
monitoring and measuring the benefits.
Collaboration
Also, collaboration with other authorities including parish and district councils should be built into
the new contract. Further opportunities to collaborate with neighbouring authorities needs to be
exploited. Resource availability and capability is an issue once again in implementing, managing and
quantifying the benefits of collaboration as WSCC do not currently have the resources and expertise
in order to exploit all the benefits of collaboration at this point in time.
Supply chain
WSCC have a desire to have input into sub-contractor contracts and to maintain local SMEs in the
supply chain. Currently WSCC are procuring some services on Option C – Target cost with BBLP who
in turn procure sub-contractors on an Option A – Lump sum which undermines the benefits of the
original target costing.
Need to ensure the supply chain are on back-to-back contracts to reflect contract engagement with
WSCC.
Pricing/cost management
There is a lack of resource to oversee commercial activities. There is a need for a proper dedicated client contract team structure to manage the contract. This contracts and commercial team would be a collaborative, co-located team responsible for:
Managing all commercial aspects of the contract
Final pricing
Accounts
CEQs The activity schedule is not accurate enough and leads to cost issues and discussions with the contractor. Activity Schedule needs to be based on bands. Activity Schedules need to be accurate. Pricing mechanism needs to change. Need banded rates for pricing. A lot of issues would be
resolved.
Tier 2 suppliers do use Open Book Cost Management (OBCM) but there is no resource to check this. Issue of timing of budgets, budgets not fully agreed until March, costing done before then. Current lump sums are good value through BBLP.
Cost transparency and cost certainty are currently sub-par.
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BB schemes supply chain are awarded on lump sum prices (Option A) for Highways improvements
schemes. WSCC contract with BB is Target Price (Option C). Therefore, the contract incentives are
not consistent.
*Target costing used for over 50k, Option A used for under 50k (Option C too labour intensive for
smaller works). Lack of training for Option C.
*Pricing option is based on each service? What suits the service.
Contract inflation should be included in the baseline budget
Asset Mgt
Asset mgt does not really feature at all in the current contract and does not support a WLC
approach. There could be lots of learning and best practice from other authorities that would benefit
WSCC. An efficient system to capture and update Asset Data is an important facet of the new
contract that should drive an Asset Mgt approach in the future. In light of DfT Incentive funding, this
should form a priority in the new contract where WSCC are well ahead of the requirements stated.
IT Systems
The IT systems need to be aligned to the requirements of the contract. Currently there are some
failings. There is a need to ensure contractor uses a shared system and a shared database.
Contractor needs a direct link to SAP
Need to consider using a contract management system
Contractor needs to be on the network or using a SharePoint type approach
Conject and Confirm (The two primary IT interfaces currently utilised) – there is a disconnect. We
can do without Conject and manage this in a different way. Conject is not user friendly. We would
need to add CE information to Confirm. The Confirm dashboard is now working well for us.
Service Drivers and Efficiencies
Obvious opportunities for efficiency gain:
Change intervention level on safety plus works – 40mm >50mm Reduce Urban grass cuts 7>5 (£1.5m spend) Empty gullies on risk basis Bring road condition surveys into TMC and reduce network coverage Reduce winter maintenance coverage currently 42%>30%. Review routing. Border collaboration. Change pothole criteria (but fix neighbouring potholes) Move more reactive maintenance into planned e.g. Bridges Review depot property Co-locate contractor and WSCC
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Appendix C Market Testing contractor attendee list
Name Company Name Email Address
Mike Notman Ringway [email protected]
David Binding Ringway [email protected]
Matthew Young Skanska [email protected]
Tony Cook Skanska [email protected]
Bob Pizzey VolkerHighways [email protected]
Bernard Hodgkenson Kier [email protected]
Steve Phillips Balfour Beatty [email protected]
Simon Watson Balfour Beatty [email protected]
Philippa Hammersley Balfour Beatty [email protected]
David Ogder Amey [email protected]
Matt Kelley Amey [email protected]
Steve Lofts Amey [email protected]
Alistair McBeath Tarmac [email protected]
Paul Ahsonollah Tarmac [email protected]
Alan Cowan WSP [email protected]
Matt Batchelor HSL [email protected]
Richard Collins Colas [email protected]
Paul Middleton Colas [email protected]
Ian Darroch Tarmac [email protected]
Dawn Clifford Costain [email protected]
David Bailey Costain/CH2M [email protected]
Gary Massey Costain/CH2M [email protected]
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Appendix D HMEP Procurement Route Choices Toolkit process
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Appendix E HMEP Toolkit Outcome – Explore options
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Appendix F Suitability, Feasibility and Acceptability Matrix
DELIVERY OPTION MODELS
Suitability - Objectives
Suitability - Time
Feasibility - Cost
Feasibility - People
Acceptability - Political
Does this option satisfy
the WSCC objectives that
have been identified and agreed to be
achieved within this
Procurement?
Does this option fit
with and suit the existing
planned WSCC
timeline for delivery of
this Procurement
?
Does the cost of this option fit with the existing planned
WSCC budget for
service delivery?
Does the WSCC have
the resources,
capabilities, knowledge
and experience to deliver
this option model?
How well does this option satisfy the needs and
expectations of WSCC
members and other key
stakeholders?
Private Funding
Does not satisfy
objectives
Probably insufficient
time to procure
Likely to be expensive and lack of
budget certainty
Not Acceptable
Not acceptable
Single Provider
Does satisfy procurement
objectives
Procurement timeline is
short so that would suit
single provider contract
Yes, but dependent
on tendered prices and
flexibility of service
combined with
payment mechanism
s
Current contract is
single provider;
team does have
capability to deliver but needs top up training
Acceptable
Multiple Providers
Does satisfy procurement
objectives
Probably sufficient time to procure
Yes, but dependent
on tendered prices and
flexibility of service
combined with
payment mechanism
s
Current staff would
have capability to deliver this model but
would need top up
training
Acceptable
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Framework
Does not satisfy
objectives due to limited contract duration
Not acceptable as
4-year contract duration
limit. WSCC want longer contract for stability and
budget certainty
Yes, but dependent
on tendered prices and
flexibility of service
combined with
payment mechanism
s
Potentially does have capability with small
team of experienced
staff
Acceptable
Joint Venture Does satisfy
procurement objectives
Probably insufficient
time to procure
Yes, but dependent
on tendered prices and
flexibility of service
combined with
payment mechanism
s
Potentially does have capability with small
team of experienced
staff
Possibly not acceptable as provider seen as one entity so could lose
powers within contract
In-House
Does not satisfy
objective of budget saving
Probably insufficient
time to procure
Possibly not due an anticipated increase in
staff requiremen
t
Current resource has lost a
lot of hands on
experience so this
would not be suitable
Probably not acceptable as
increase in staff may
result when pressure is on to continually
reduce revenue budgets
In House top up
Possibly not due an
anticipated increase in
staff requirement
Probably insufficient
time to procure
Possibly not due an anticipated increase
in staff requireme
nt
Current resource has lost a
lot of hands on
experience so this
would not be suitable
Acceptable assuming minimal
increase is staff
Teckal
Yes, as budget
transferred to separate
entity however risk to authority to cover any
Probably not due to legal input
and political clearance required
Yes, as budget
transferred to
separate entity
however risk to
authority
Current resource
questionable on
breadth of expertise
to manage a Teckal
Could be acceptable
with current budget
pressures
Page 47 of 47 Outline Business Case Final 28.11.16 Confidential & Commercially Sensitive
deficit in funding
to cover any deficit in funding