Highways Agency

2.1 Best Value

Putting Customers First

Our Procurement Strategy Principles have proved an effective framework within which we have developed our new selection process, new forms of contract, performance measurement toolkit and ways of working in long-term partnerships.

Our Procurement Strategy has supported our new role in moving away from an asset manager to a deliverer of services to our customers.

We welcome the National Audit Office's consideration of the bigger picture of construction procurement across the public sector. The NAO's 2005 report 'Improving public services through better construction' identified actions which Government departments and agencies should take to improve their construction delivery performance further. In particular the NAO recognised the problems caused to the supply chain by volatility in forward programmes. With greater commitment to longer-term forward plans it would be possible to achieve better value through improved methods of procurement.

This review of the Strategy sits alongside the Highways Agency corporate vision Customers First and also covers the six main actions recommended in the NAO report. During the next five years the Agency will be working to put customers at the heart of our business. Our Corporate Plan and vision - Customers First- sets out our aims, what the Agency needs to achieve to become a customer-focused organisation. Our suppliers are crucial to this vision. We need suppliers who can deliver high quality services, which improve year on year. We will not tolerate performance that does not meet the high expectations of our customers.

As we move into this exciting new chapter for the Agency, HA procurement has identified a new principle:

• Collaboration - Clients working together to achieve better value and more effective delivery of services to customers.

Taking forward the Customers First ethos we will be working in collaborative partnerships to:

• Achieve greater understanding of, and responsiveness to, the needs of customers and stakeholders by engaging with local communities
• Achieve continuous improvement in the delivery of front line services
• Involve the supply chain in identifying opportunities for improved collaboration and more efficient delivery of best value solutions and services
• Drive down cost and speed up delivery.

The following section sets out where we want to be in the light of Customers First and how the HA's Procurement Principles will be applied to get there.

Our Priorities for Future Successful Delivery

2.1 Best Value

- an improved understanding of how to achieve and demonstrate best value

We define best value as the delivery of business objectives at the lowest affordable cost while achieving continuous improvement.

The four key components of best value are effectiveness, efficiency, and economy underpinned by the demonstration of continual improvement. To achieve best value in the procurement of services and solutions it is necessary to apply the HA Procurement Principles intelligently to all our purchases. Successful delivery demands a strong Customers First culture with performance measures aligned with HA corporate objectives. It is also a fundamental requirement that forward programmes are robust, reliable and transparent to the supply chain.

Selecting the Supplier Delivery Team

We are already using capability and performance data to influence decisions, selection of suppliers and development of new forms of contract:

• The CAT principles will be rolled out in other procurement areas to help identify those suppliers most capable of delivering the best value solution for the Agency's requirements
• For major projects and maintenance contracts the ratio of CAT score and past performance data will move towards 50:50 as we gain more reliable data of performance
• CAT scores and past performance data will be analysed to confirm the link between capability and delivery of best value services.

The Tendering Process

• Best value tendering will be extended to other suitable areas of procurement
• We will retain Quality and Price tendering where we are best able to define our requirements enabling tenderers to assess risk and price realistically at the outset
• We will establish a panel of trained and experienced staff to undertake the majority of tender assessments to improve consistency and obtain maximum value from the process.

Measuring Performance and using results

We will continue to measure delivery and improvement over time by our suppliers across all our service requirements using our Toolkit for Performance Measurement. This draws on contractual indicators from the Construction Best Practice Programme:

1. satisfaction with the product
2. satisfaction with the service
3. predictability of cost
4. predictability of time
5. safety
6. defects

Together with this:

• We will establish new targets to support improved delivery of service to customers, building on Performance Indicators already in place for Area Maintenance contracts
• We will define a consistent standard for cost measurement and establish tools for benchmarking our suppliers' services
• We will build on the work undertaken within the Maintenance Community to develop indicators for other business areas, such as Major Projects, which is ongoing. These are in line with the Agency's core objectives for delivering Safe Roads, Reliable Journeys and Informed Travellers.

Performance Review and Improvement in Delivery (PRIDe)

The PRIDe concept, including audit, is well-established in the Area Maintenance Community as a means of identifying process improvements and compliance failures and, by taking remedial measures, driving performance improvement. But we want to achieve greater ownership of audit findings and implementation of best value remedial actions by our suppliers and project teams through:

• Establishing best practice and procedures for monitoring continuous improvement which will be owned and implemented by respective operational areas within the Agency and our suppliers
• Utilising Communities as a forum for identifying best practice and innovation as well as the practicalities of implementation
• Auditing the core processes at the heart of delivering best value services with the objective of driving out waste from all parts of the procurement cycle including service delivery
• Encouraging suppliers and Agency project teams to identify and implement continuous improvement in service delivery including cost savings.