Highways Agency

Construction Industry Consultation

Highways Agency Proposals for Packaging Future Major Improvement Schemes

Purpose

This consultation document aims to obtain industry views on the Highways Agency's ("HA") proposed principles for packaging future major improvement schemes, i.e., those with estimated values over £5M.

Background

The HA intends to deliver its contribution towards "Transport 2010: The 10 Year Plan" in close partnership with our suppliers. The overlying principles that the HA will adopt for delivery of the 10 Year Plan are described in the document "Delivering Best Value Solutions and Services - Highways Agency Procurement Strategy", which was published in November 2001 and is available on the HA website.

The 10 Year Plan provides an indication of the forthcoming major improvement schemes. The plan anticipates:

• 80 schemes to improve safety and traffic flow at junctions
• 30 new bypasses
• 360 miles of trunk road widening

The spending plans included in the 10 Year Plan allow for 25% of the additional capital investment in the trunk road and motorway network coming from private finance. The principles outlined in this document relate to packaging major improvement schemes for delivery using conventional public funding. Separate opportunities for private finance are being considered alongside the development of major improvement scheme packaging.

Perceived Benefits of Packaging Major Improvement Schemes

A partnership approach based on long-term relationships is one of the key overlying principles in the HA's Procurement Strategy. To achieve this aim for future major improvement schemes, the HA is seeking to package schemes into larger, longer-term contracts. It is considered that the benefits of this approach will be to:

• Secure the external resources required to deliver the HA's part of the 10 Year Plan
• Speed up delivery through a reduction in the number of procurement exercises and earlier contractor appointment
• Allow successful teams to be retained
• Make the best use of developed skills and invested knowledge, enabling learning to be carried forward
• Facilitate the recruitment and retention of skilled resources by suppliers
• Facilitate business planning, including more efficient resource management and work scheduling
• Provide greater certainty of work that will allow greater investment in training and product development
• Unlock potential savings of scale
• Facilitate continual improvement by providing the supply chain with a long-term work stream
• Facilitate performance measurement and the dissemination of best practice

Proposed Packaging Principles

The following packaging principles have been developed in order to maximise the benefits of packaging. The HA proposes that major improvement scheme packages should:

• be geographically based to allow teams to be retained within a reasonable operating area
• contain similar types of work
• make effective use of the available resources by ensuring a range of package values to provide opportunities for a wide range of suppliers
• contain schemes that are programmed to be delivered consecutively, but with some scope for overlap
• exclude complex schemes that would require a high degree of specialist input (e.g. tunnelling) or carry significant risks to delivery

It is considered that packaging is a natural progression from recent "early contractor involvement" schemes. Packaging would allow the very early establishment of an integrated delivery team that will be maintained throughout delivery. Schemes within packages would be progressed in two broad phases: (1) planning and design, and (2) detailed design and construction. The package contracts would incorporate incentives and the payment mechanism for construction would be Target Cost with open book accounting.

Construction Industry Consultation

The following questions have been designed to obtain industry views on key aspects of packaging major schemes before any firm decisions are taken. In order to influence the decision making process for packaging, responses are requested by Monday 16 September 2002:

Questionnaire

This consultation is now closed.