Roads 2011 Where are we on Procurement

Monday 21 November 2011, CBI Conference CentreSteven.dennis@tfl.gov.uk

Signed off Strategy• Framework agreement – 4 Lots / Alliances

• Supplier must be able to provide the full range of

services either in house or supply chain

• Direct call-off by clients within the Lot Area.

• Clients only have to take the service they want

• NEC3 Contract

• We want suppliers to work with us and each other

• Value for money!

Four Alliance Areas NE – LoHAC£26m pa

C – LoHAC£56m pa

NW – LoHAC£35m pa

S – LoHAC£55m pa

Total estimated value between £747m and £2.64b

Alliance Development Team

Technical Specification

• Review of 30 odd existing specifications

• First Draft send to Boroughs & TfL

• Two workshops held - 23 Authorities attended

• 2nd Consultation period ended 4th Nov

• Formal responses 14 received» 2 No Comments» 7 very detailed» 5 focused on specific areas

Standard Detail Drawing

• 60 Standard Detail Drawing Produced

• Five Boroughs volunteered to review them

• Comments received back and are being taken on board

Procurement

• OJEU: 5/10/2011

• Industry day 24/10/11 – 22 suppliers attended

• PQQ submission: 16/11/2011

• PQQ Evaluation process 17/11/2011 – 2/12/2011

• PQQ consensus meeting - 9/12/2011

• Prelim report to TLHM Board Dec

• Final recommendation to TLHM Board Mid Jan

Procurement 2

• Announce ITT shortlists end Jan

• Issue ITT early Feb

• Tender submission: 12 weeks

• Award of contracts: November 2012

• Contract commence: April 2013

Framework Approach • TfL is letting the Frameworks on TLHM behalf

• TLHM Board have reserved the right to award more than one Lot to a single contractor.

• Common governance and performance management.

• NEC Price List provision for Target Cost and Cost Reimbursable

• Common schedule of rates – Area wide

– Base price - uplifts for road type / ToD / restrictions

• Individual Authorities Lump Sum prices

• Individual Authorities unique item / requirement prices

Common Contract

• Reviewed existing contracts

• Input from htma, existing suppliers & authorities

• Eversheds now appointed to support the project

• Draft of Framework produced under review within TfL and by external Lawyers.

• Draft Call off Contract circulated to three volunteer Boroughs for review

• Allow use of client buying power via E Auctions

Performance Regime

• Working very closely with the LoHAC Culture Change Working Party

• Contractual and Non Contractual KPIs– Contractual measure contract compliance– Non Contractual measure client and supplier joint

working and contribution towards client goals

• Contractual KPIs linked to Framework term length– Eight year Framework Term– Supplier doesn't achieve them - term reduced– Supplier does perform - lost time is awarded back

Stakeholder Liaison

• All Boroughs asked to give:– Any expression of interest– If interest for what services and from when– Under what basis they wish to procure Lump Sum - SoR

• Regular meeting with Boroughs most likely to use the new contracts from 2013/14 – Tier 1.

• Regular forum established with Tier 1 Boroughs. - Open to others

• Potential users provided with list of asset and contract information required for inclusion in ITT.

National Comparison

• Highways Maintenance Efficiencies Programme Survey - Over 80 authorities (approximately 55%).– The most common form of maintenance contract was

the NEC, with over two thirds of authorities using it in some form.

– A standard form of contract based on the NEC would be welcomed by Local Highway Authorities.

– 95% of respondents supported the development of a standard specification.

– 31% of respondents were already in some form of alliance, and 26% were looking into joining or forming such an arrangement.

Benefits Realisation

• Standard Contract Documents - Staff time savings associated with maintaining bespoke documentation, average £80K* per authority – up to £3m based on those likely to go to the market nationally

in the near future. – overall savings of £12m to be realised if all Local Highway

Authorities move to one standard form.

• Collaborative Alliances for medium sized authorities a figure £1.1m** pa per authority was identified.

http://www.dft.gov.uk/topics/local-authorities/hmep/docs/111027-wsg1-survey-update.pdf

*TLHM Business case 72k ** TLHM Business case 10-15% savings

Summary

• On Track

• Still a lot to do

• Not to late to join

• Borough input is vital and appreciated

• Market response has been very positive

• Large scale collaborate works

• Highway Alliances Work

Questions?