Eight East Midlands council's, one East of England council and the Highways Agency have joined forces in a major new venture to improve the design and delivery of highways projects and drive through efficiency gains
The partnership, titled the Midlands Highway Alliance (MHA), went live last year when the councils and the Highways Agency signed an Alliance Agreement at a ceremony hosted by Leicestershire County Council, the lead authority.
By working together, the MHA aims to reap efficiency gains of up to 10 per cent on contracts, speed up the procurement process and deliver schemes to a higher standard.
The Alliance estimates that projects valued at £50 million will be procured through the first of a number of regional frameworks in its first year. This is expected to increase to £150 million in the following years as public bodies come under greater pressure to realise efficiency gains in the face of spending constraints.
MHA framework agreements are also open to highways authorities in the West Midlands, therefore the potential turnover is expected to be at least double this figure. All highway authorities in the central government-defined East and West Midlands regions together with those adjacent authorities in neighbouring regions can become Alliance members by signing the MHA Agreement.
The organisation of the Alliance comprises of an Executive Board, a Programme Board and five Working Groups.
The development of this initiative has been supported by the East Midlands Improvement Partnership (EMIP), now re-titled the Regional Improvement and Efficiency Partnership (RIEP), which provided £250,000 of pump priming money over two years.
CWC (the Collaborative Working Centre) was commissioned as the support consultant to help advise and resource some of the technical work.
The MHA working groups will focus on delivering improvement and efficiency savings in the following five key areas each led by a member authority:
The five working groups are progressing rapidly and the Major Schemes Working Group has identified a number of participant authorities. Northamptonshire and Leicestershire County Councils are exploring the Major Schemes framework and will look to engage with other local authorities.
The MHA has also selected four contractors to service the Medium Schemes Framework. Balfour Beatty, Carillion, AIGOL (Aggregate Industries and Geoffrey Osborne joint venture) and Tarmac were unveiled as winners of the contract at the MHA Programme Board meeting last November.
The Medium Schemes Framework (MWF3) is a three-year contract (extendable to four) for new highways schemes valued at up to £8.0m. The contract form is NEC target cost. The MHA estimates that £48m will be procured through this new framework in the first year.
A number of members of the MHA are already in the process of commissioning schemes through this new arrangement. Leicestershire will be using it to using it to deliver a £1.5m major junction improvement and a new £5m park and ride site in the next six months. Peterborough City Council has three major areas of work it intends using the framework for, its Public Realm scheme, major road and bridge maintenance, and a junction improvement, with an estimated overall value of £15m. Leicester City Council is considering using the framework for a major new bridge scheme associated with its regeneration agenda. Lincolnshire is considering its use for a major reconstruction scheme in the south of the county. Derbyshire has two potential schemes associated with regeneration projects.
In the West Midlands two authorities, Staffordshire and Warwickshire have also expressed an interest in accessing the framework as opposed to using conventional tendering.
A data analysis exercise for the Term Contract (Maintenance) has recently been completed. With an annual expenditure of £120 million this strand of work has the potential to deliver the largest volume of cashable efficiency savings. The working group is currently preparing a revised commission brief, completing a gap analysis study, and developing a best practice model.
Derbyshire County Council is leading the Commodities Work Group, which is concerned with the joint procurement of commodities such as road surfacing materials, kerbstones, traffic signals and lamp posts. The East Midland Centre of Excellence estimates that £50 million of such commodities will be purchased each year, with efficiency savings being delivered through the exploitation of economies of scale and smarter procurement.
In order to safeguard the progress of the Alliance a programme manager position will be recruited. Project management of the MHA is becoming increasingly critical as more and more working groups get off the ground.
This approach is already being recognised as a model of best practice and the Highways Agency has commissioned CWC to support its development elsewhere in the country including in the east and south east regions.
Highways Agency, an Executive Agency of the Department for Transport, answers questions by Sandra Heavenstone on the Midlands Highways Alliance (MHA).
Q. How is this method of procurement any different to previous procurement procedures and how has it been developed and financed?
A. This is the first time the Highways Agency has developed a collaborative framework contract, with the direct intention of allowing local authorities in the Midlands to use one of its maintenance contracts. A contract working group was set up, consisting of representatives from the Highways Agency and the local authorities in the MHA, to develop the scope of the contract. The group now meet regularly to discuss the working of the contract and to share best practice. The framework was set up according to the normal procurement process for framework contracts.
Q. How will grouping local authorities together to obtain procurement of services increase efficiency?
A. By using one contract instead of procuring maintenance work separately, it is hoped there will be significant efficiency gains to be made in terms of saving time, money and sharing best practice for future work. The MHA is the first of its kind.
Q. Who will set the criteria for contract tenders and monitor standards?
A. A contract working group was set up to assist throughout the procurement process and a member of MHA sat on the tender assessment board. In addition, when work is awarded under the contract a member of the MHA will sit on the framework board - along with the contractors. When selecting a supplier from the framework the same evaluation criteria are followed as specified in the original contract.
Q. Is this method a template to be used by other groups of LA's throughout the UK in the future?
A. The Midlands Highways Alliance is currently the first of its kind, if successful, we will look to see if the model can be rolled out more widely.
For more information
For further details and to take advantage of this framework please contact:
Leicestershire County Council
Chairman of the MHA Board
Director of Highways, Transportation and Waste Management
tel: 0116 305 7001